Budget Your Way to a Killer IRA

When you first get out into the working world, you need to start saving money. But saving money is a skill, not a hereditary trait. When you become a working stiff, learning how to squeeze as much as you can out of a dollar is vital to becoming a successful person. And it all starts with learning how to budget and how to stick to a budget. That way you can start to put away you extra money in an IRA and get ready for retirement.

Start by finding a good budgeting software that allows you to keep track of your spending and watch every penny. It may seem like a burden at first, but once you learn how to do it, you can save lots and lots of money and be able to fund a real killer IRA with all that extra dough. Get familiar with Excel or even QuickBooks online in order to start to track your income and your expenses.

There is no substitute for discipline when it comes to keeping track of your money. That is how you really make budget that will last and bring your money woes under control. Start by keeping track of all your income sources. Whether you are selling your books on eBay or your video games at a garage sale, you want to make sure where your money is coming from. And you want to keep an eye on your pay stub from work, you you are making as much money as possible.

Once you have your income sources under control, it is time to figure out what your regular monthly expenses are, so you can being to cut those down. Earning more money is good, but spending less money is even better. You need to spend as little as possible, so your earnings outweigh your spending by a lot. And you can take that difference and fund all your savings accounts, from your IRA to your emergency savings.

You need to categorize your expenses into fixed and variable. That is where you can learn which expenses you can expect to stay stable each month and which are going to go up or down. That is the first step to getting them under control. Enter both your income sources and your expenses into a spreadsheet like Excel so you can keep track. And you can make sure that you keep that gap between earning and spending as large as possible.

Once you do that, you take all your extra money and start to fund an IRA. With a traditional IRA, you can fund your savings with pre-tax money and reduce the amount of income you will be taxed on. That is a win for right now. However, you will be taxed on the money that you take out of your IRA when you get to retirement age, but the best way to take advantage of that is to make sure that you are taxed at a lower rate when you are retired.



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