Once a Budget is set into place this allows for “Money Over Expenses” to be allocated into a Savings account. This is one way money can be utilized over expenses. However, there is another way. It’s called the 3 Needs of Purpose: Security, Growth, and Dream. Security protects money while investing it through the Growth need, allowing money left over for desired Dreams. How to feed these 3 Needs of Purpose? This happens with “Money Over Expenses”. It’s called the 60/40 split.
Simple math makes this process very easy. A person earns $1,000 for the month. Their personal Monthly Budget is $900. This leaves $100 for “Money Over Expenses”. This remaining $100 is pulled into the 60/40 split. 60% of that $100 gets placed evenly into the 3 Needs of Purpose. The remaining 40% is placed into Savings. Since a Budget is designed to cover all expenses, anything left over is play money. This is a smart way to look at money coming in and going out.
Maintaining a Budget is a great start to building a big pile of Savings. Placing money into the 3 Needs of Purpose helps generate future wealth opportunities. Then, there is the 3 Month Safety Net. This is a person’s Monthly Budget multiplied by 3 and that total delegates a Cap for Money Over Expenses to accumulate. This will provide additional protection with three months of life accounted for, while also giving an individual a strong foothold on their 3 Needs of Purpose, and Savings!
PS… Can you find the monkey?
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