BUDGETING may become less of a burden thanks to five easy steps shared by a finance expert.
Ex-Wall Street trader, Vivian Tu, who goes by the name Your Rich BFF on TikTok, has a passion for financial literacy and helping others make strong, financial decisions.
1
Vivian Tu is a personal finance expert with over 1million followers on TikTok
With nearly 11million views on TikTok, Vivian encourages her followers to strip – but not in the way you may think.
S.T.R.I.P. is a cheeky acronym she used in her recent TikTok video as an easy way to learn how to budget.
S.T.R.I.P. stands for savings, total debt, retirement, invest and plan.
Here’s of breakdown of the steps in order to start growing your funds, even if you’re a budgeting beginner.
1. Savings
She suggests saving three to six months’ worth of living expenses.
Once you’ve done that, it could be beneficial to put your money into a Federal Deposit Insurance Corporation (FDIC) high-yield savings account (HYSA) so you’re getting the most out of your money.
These high-yield savings accounts typically pay 20 to 25 times the national average of a standard savings account.
She uses Marcus by Goldman Sachs, but most HYSAs are the same.
2. Total debt
If you’re in the red, you may want to rank your debt based on the interest rates – and tackle them accordingly.
She recommends going from highest to lowest, and then paying debts off in that order.
She suggests paying off any debts with a 7% interest rate or higher first before continuing onto her next steps.
3. Retirement
It can also be beneficial to take advantage of tax-efficient retirement accounts like IRAs or Roth IRAs.
For Roth IRAs, you can contribute after-tax dollars, your money grows tax-free and you can typically make tax- and penalty-free withdrawals after age 59 and a half.
A traditional IRA allows you to contribute pre- or post-tax dollars, your money grows tax-deferred and withdrawals are taxed as current income after 59 and a half.
If you choose to set up one of those accounts, try to max out your contributions.
You can then invest in things like simple index funds or target-date funds.
Simple index funds are investment funds that follow a benchmark index, like the S&P 500 or the Nasdaq 100.
While target-date funds are aged-based retirement investments that are more of a risk when you’re young but get more conservative over time.</…….
Source: https://www.the-sun.com/money/5328320/expert-budgeting-tips/