Money Advice

The two things about your money you can actually control

Posted by The Simply Money Advisors Team on Nov 14, 2018 9:00:00 AM

When it comes to your money, it can sometimes feel as if you don’t have power over anything.

Markets go on short-term swings that occasionally defy rational explanation. The Federal Reserve, our nation’s central bank, can change the trajectory of interest rates with just a press conference. Companies slash bonuses or freeze pay raises seemingly on a whim. And candidates you never supported get elected and pass economic agendas you never agreed with.

Yes, it’s easy to feel defeated at times.

But at Simply Money Advisors we don’t want you to take that attitude. We want you to feel empowered. We want you to control what you can control.

And at the top of the list is controlling how much you spend… and how much you save. Because, while there’s so much in the world you can’t control, you have sole discretion over how you use your paycheck.

For a little guidance, aim for the Simply Money rule of 50/30/20:

  • 50% of your monthly take-home pay should go to your “needs.” Examples include your mortgage, groceries, car payments, utilities, etc.
  • 30% of your monthly take-home pay should go to “wants,” such as the latest smartphone or TV, your family’s Netflix account, dining out, etc.
  • 20% of your monthly take-home pay should go to savings. This can be divided into different categories, such as building your emergency fund, saving for college, saving for retirement, saving for a down payment, saving for vacation, etc.

Yes, there can be some give-and-take between the “needs” and “wants” – but there shouldn’t be any wiggle room with the 20% savings. That should stay static.

And remember, saving 20% of your money every month is a goal. If you’re not there yet, take little steps every year to get closer: reassess your budget to see which of your “wants” you can cut back, automatically increase your 401(k) savings by 1% or 2% a year, and save any raises or bonuses when you’re fortunate enough to receive them.

The Simply Money Point

Most Americans, when recently surveyed by Bankrate, say their biggest financial regret is not saving enough. Don’t let this be you. Because then you’ve really lost all control.

Instead, focus your energy on just two simple things: how much you spend and how much you save. Getting on the path to retiring well doesn’t get any more cut-and-dry than that.

To educate yourself more about retirement planning, visit our Retirement Resources library. You’ll find downloadable guides and video tutorials on topics ranging from Social Security, to managing a “forced” retirement, to how to select a financial advisor.

Take me to Retirement Resources

Topics: Financial Planning


Please remember that past performance may not be indicative of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Simply Money Advisors), or any non-investment related content, made reference to directly or indirectly will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.  Due to various factors, including changing market conditions and/or applicable laws, this content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained here serves as the receipt of, or as a substitute for, personalized investment advice from Simply Money Advisors. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Simply Money Advisors is neither a law firm, a certified public accounting firm, nor a tax advisory firm and no portion of the blog content should be construed as legal, accounting, or tax advice. Please consult your own attorney, accountant, and tax advisor for legal, accounting, and tax advice. A copy of the Simply Money Advisors’ current written disclosure statement discussing our advisory services and fees is available for review upon request. Advisory services offered through Simply Money Advisors, a SEC registered investment adviser. Insurance services are offered through Simply Money Insurance Agency, a separate entity from Simply Money Advisors. Simply Money™ and the spiral symbol are trademarks of Simply Money IP Holdings, LLC.

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