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The Keys to Sticking with a Budget are Keeping it Simple and Making it Purposeful – Presented by Mark K. Lund, Financial Advisor in Utah

Financial Advisor Utah

The most significant thing you can do to take control of your finances is keep a budget. No matter your income level or stage of life, it will help enable you to do the most with your money and give you greater peace of mind.

An ongoing budget not only gives you a current picture of how you’re spending your money, but it helps you plan ahead for near-term things like annual insurance premiums and car repairs, as well as long-term things like retirement.

Some of that might sound like not much fun. But being on a budget doesn’t mean you can never do anything enjoyable with your money. It actually gives you permission to dream big and look forward to things like an exotic vacation. Have you always wanted to spend a week on the beach in Fiji? Start with a budget category, begin putting away money each month, and you’ll be amazed how soon you’ll be shopping for the best flights.

However, despite these advantages, nearly three-quarters of Americans don’t regularly follow a budget.1 Why? Because it seems complicated and tedious. If you’re not a bookkeeper at heart or a wiz with spreadsheets, it’s easy to give up.

But there’s a deeper reason people don’t consistently keep up with their budget each month. It’s lack of motivation. While most people know that keeping a budget is the responsible thing to do, actually sitting there and entering receipts is not very satisfying.

The solution might be found in a 120-year-old Japanese budgeting method called Kakeibo (kah-keh-bo). Think of it as a way to declutter your finances similar to how Marie Kondo would declutter your house.

Jennifer Nelson, writing for Marketwatch, explains that Kakeibo is a simple way to document your income and spending while reflecting on why your money is going where it goes.2

First, you track your income and expenses like with a regular budget. Then, at least once a month, you think about and write down the answers to the following questions:

How much money do I have this month?

How much would I like to save?

How much am I spending?

How can I improve?

The system has you divide your spending into four areas: Needs (essentials), Wants (pleasures), Culture (activities), and Unexpected (emergencies and repairs). These four “buckets” can be subjective. For example, you may feel strongly that your Peloton subscription is essential to your wellbeing.

This method is a great way to step back from the columns of dollars and cents to examine exactly what your money is doing for you personally. And to see ways you might better direct it to make the most difference in your life.

As always, when it comes to budgeting, planning, and dreaming “what if,” your trusted advisor is there to help you at every stage.

If you ever have any questions about your investments or retirement plans, please feel free to give me a call at 801-545-0696.

Regards,
Mark Lund
Stonecreek Wealth Advisors, Inc., A Financial Advisor in Utah
11576 S State Street, Bldg. 1002
Draper, UT 84020

Sources:
1. http://go.pardot.com/e/91522/ays-a-financial-therapist-html/8gvsbs/1720656965?h=etQUyQpIlp9RY1kwVl2xrBOXUHXRRaXGl1Gd9jZbQHw
2. http://go.pardot.com/e/91522/ur-spending-habits-11654270689/8gvsbw/1720656965?h=etQUyQpIlp9RY1kwVl2xrBOXUHXRRaXGl1Gd9jZbQHw

This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This material was prepared by Efficient Advisors, LLC (“EA’) for Mark Lund, Mark is a Financial Advisor in Utah. He is known as a Wealth Advisor, The 401k Advisor, Investor Coach, Financial Planner, Investment Advisor and author of The Effective Investor. Mark offers investment advisory services through Stonecreek Wealth Advisors, Inc. a fiduciary, independent, fee-only, Registered Investment Advisor firm providing investment management and retirement planning for individuals and 401k consulting for small businesses. Mark’s newsletter is called The Effective Investor Newsletter. Cities served in Utah are: Salt Lake City, Salt Lake County, Utah County, Park City, Murray City, West Jordan City, Sandy City, Draper City, South Jordan City, Provo City, Orem City, Lehi City, Highland City, Alpine City, American Fork City. The views expressed herein are exclusively those of Efficient Advisors, LLC (‘EA’), and are not meant as investment advice and are subject to change. All charts and graphs are presented for informational and analytical purposes only. No chart or graph is intended to be used as a guide to investing. EA portfolios may contain specific securities that have been mentioned herein. EA makes no claim as to the suitability of these securities. Past performance is not a guarantee of future performance. Information contained herein is derived from sources we believe to be reliable, however, we do not represent that this information is complete or accurate and it should not be relied upon as such. All opinions expressed herein are subject to change without notice. This information is prepared for general information only. It does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person who may receive this report. You should seek financial advice regarding the appropriateness of investing in any security or investment strategy discussed or recommended in this report and should understand that statements regarding future prospects may not be realized. You should note that security values may fluctuate and that each security’s price or value may rise or fall. Accordingly, investors may receive back less than originally invested. Investing in any security involves certain systematic risks including, but not limited to, market risk, interest-rate risk, inflation risk, and event risk. These risks are in addition to any unsystematic risks associated with particular investment styles or strategies.

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