Yahoo Finance The Best Financial Strategy Tailored to Your Income, According to Money Expert Humphrey Yang
Diet. Budget. It seems like a lot of consumers in the United States hate both of these concepts. Whether it’s losing weight or cutting back on spending, both options can seem very limiting.
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According to CNBC, many Americans dislike the term budgeting. Still, nearly 70% of consumers said a budget would help them, but 40% said they have never had one.
That said, what if you applied budgeting to your own life the way owners do to businesses? That’s one piece of advice from Humphrey Yang, a former financial advisor with more than one million subscribers on YouTube. He suggested tailoring your financial strategy according to your income.
For example, let’s say your income is $75,000 per year. Yang said there are a few steps to take to start your financial strategy and put yourself on a road to longer term success.
1. Figure Out Your Spending
Yang suggests a good first step for anyone is to figure out how much money is coming into your bank account versus how much is going out. Just like a business, you need to know what money you have to work with for yourself. Yang said you get bonus points for figuring out what categories you spend the most money on from your account.
2. Figure Out Your Net Worth
The second step is to track your net worth. You can do this by subtracting your total liabilities from your total assets. If you want help, you can check the net worth calculator from Ramsey Solutions.
3. Figure Out Your Target Savings
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The third step is to figure out your target savings numbers by age. According to Fidelity, you should try to aim for having three times your salary by age 40 and six times your salary by age 50. If you’re making $75,000, that means saving $225,000 by age 40 and $450,000 by age 50.
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This article originally appeared on GOBankingRates.com: The Best Financial Strategy Tailored to Your Income, According to Money Expert Humphrey Yang
