{"id":15140,"date":"2023-09-13T14:12:44","date_gmt":"2023-09-13T19:12:44","guid":{"rendered":"https:\/\/www.bbinsurance.com\/?post_type=insight&p=15140"},"modified":"2023-09-13T14:12:44","modified_gmt":"2023-09-13T19:12:44","slug":"financial-literacy-series-2-dont-spend-more-than-you-make","status":"publish","type":"insight","link":"https:\/\/www.bbrown.com\/us\/insight\/financial-literacy-series-2-dont-spend-more-than-you-make\/","title":{"rendered":"Financial Literacy Series #2: Don\u2019t Spend More Than You Make"},"content":{"rendered":"

Financial Literacy Series #2: Don\u2019t Spend More Than You Make<\/strong>
\nby Andy Watts, Executive Vice President & Chief Financial Officer at Brown & Brown Insurance<\/em><\/p>\n

I strongly believe in the power of financial literacy. I wrote a blog on this topic<\/a><\/span> in August, and based on the feedback, it was clear we needed to create a series to dig in further. Over the next year, I will share my point of view on multiple subjects under the umbrella of financial literacy to help each of us further develop this critical skill.<\/em><\/p>\n

The idea of not spending more than you make seems obvious, but the Federal Reserve reports that almost 1 in 4 Americans<\/a><\/span> do just that.<\/p>\n

Of course, most didn\u2019t plan to be in that situation. In most cases, it is a convergence of factors \u2014 inflation, lack of wage growth and high interest rates \u2014 that have made this trend more palpable. Generally, the real issue is excess discretionary spending, or spending money on things you want, not what you need.<\/p>\n

Even if you aren\u2019t spending more than you make, 1\/3 of Americans wish they spent less<\/a><\/span> in the past month. Are you one of them?<\/p>\n

Statistics show that the younger people are, the less likely they are to have a handle on how much they spend. Only 23% of Gen-Z, for example, know how much they spend versus 27% of Millennials and 46% of Baby Boomers.<\/p>\n

Financial literacy is so important for all ages and economic stages. Are you ready to take your finances into your own hands and become more financially literate?<\/p>\n

If you spend it, track it<\/strong><\/p>\n

Keep in mind the old adage: \u201cYou can\u2019t manage what you don\u2019t measure.\u201d The first step in getting your finances in order is determining your baseline. As many as 65% of Americans say they don\u2019t know how much they spent last month.<\/p>\n

You don\u2019t have to be one of those people.<\/p>\n

Below are three steps to get \u2014 and keep \u2014 you on track.<\/p>\n

1.\u00a0 \u00a0 Take ownership of your money.<\/strong> This step is about getting organized. The first thing you need to do is create a personal tracking sheet. For three months, write down everything you spend money on. Everything. Utility bills, dry cleaning, parking, coffee, toiletries, you name it. And be sure to save all those receipts. The length of time \u2014 3 months \u2014 is important because it establishes a routine. If you can do something for three months, you can do it long-term. To make it easier, you can use this spreadsheet<\/a><\/span>.<\/p>\n

If writing it down seems onerous, consider using your credit card to track it for you. Use your credit card for everything, then you can see on your monthly statement how much you\u2019ve spent and in which categories: food, car, shopping, etc.<\/p>\n

There is plenty of technology out there that can make this step more manageable, such as Mint, YNAB, Goodbudget and EveryDollar. NerdWallet even wrote a blog detailing some of the best budget apps<\/a><\/span>. Find one that works for you.<\/p>\n

\"\"<\/p>\n

(Example Outcome to Avoid!)<\/em><\/p>\n

2.\u00a0 \u00a0 List out your income.<\/strong> Knowing what\u2019s coming in and when is just as important as what\u2019s going out. If you receive a regular paycheck, track when it comes in. This year, there are three months with five weeks. If you get paid every other week, you\u2019ll be getting a paycheck more often, which makes a difference when it comes to cash flow. In addition to your full-time job, be sure to track any money coming in from side gigs. These are often irregular, so tracking is critical.<\/p>\n

If your primary source of income is inconsistent, such as commissions or tips, as it often is for those working in sales or hospitality, round down when you estimate income. This will help in creating a more realistic budget. It\u2019s always better to have a surplus at the end of a month versus not being able to pay a bill because you overestimated how much you would be making during that pay period.<\/p>\n

3.\u00a0 \u00a0 Create a routine.<\/strong> Take time to track your income and expenses once a week. No one enjoys sitting down and paying bills at the end of each month; build a routine that has you staying on top of it more frequently. The only way to create a sustainable routine is to establish a strong pattern of taking action. Start slow, as if you were starting a new workout routine. Make a commitment to yourself and do it for three months. By then, it\u2019ll feel habitual.<\/p>\n

Next steps<\/strong><\/p>\n

Once you\u2019ve tracked everything for three months, you will have a clear picture of where you are spending your money and in which categories you can reduce your outflow. Most importantly you will have the tools and knowledge to thoughtfully reduce your spending, so you are not spending more than you make.<\/p>\n

With this information, you can now project your estimated income and expenses for the remainder of the year \u2013 with the goal of having a clear roadmap to better financial security. Good luck over the coming months \u2013 you can do it.<\/p>\n

 <\/p>\n

\"\"<\/p>\n

Evolving Finance
\n<\/b>to Support Business Growth
\nwith Andy Watts, Executive Vice President & Chief Financial Officer at Brown & Brown Insurance<\/em><\/p>\n

Subscribe to Andy’s Evolving Finance monthly newsletter and view this blog on LinkedIn here<\/strong><\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Join Andy Watts, EVP & CFO, as he embarks on a monthly series to help you control your spending and become more financially literate.<\/p>\n","protected":false},"author":45,"featured_media":15142,"template":"","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"insight_category":[133],"class_list":["post-15140","insight","type-insight","status-publish","has-post-thumbnail","hentry","insight_category-thought-leadership"],"acf":[],"yoast_head":"\nFinancial Literacy Series #2: Don\u2019t Spend More Than You Make - Brown & Brown<\/title>\n<meta name=\"description\" content=\"Join Andy Watts, EVP & CFO, as he embarks on a monthly series to help you control your spending and become more financially literate.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.bbrown.com\/us\/insight\/financial-literacy-series-2-dont-spend-more-than-you-make\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Financial Literacy Series #2: Don\u2019t Spend More Than You Make\" \/>\n<meta property=\"og:description\" content=\"Join Andy Watts, EVP & CFO, as he embarks on a monthly series to help you control your spending and become more financially literate.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.bbrown.com\/us\/insight\/financial-literacy-series-2-dont-spend-more-than-you-make\/\" \/>\n<meta property=\"og:site_name\" content=\"Brown & Brown\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.bbrown.com\/wp-content\/uploads\/2023\/09\/Untitled-5.png\" \/>\n\t<meta property=\"og:image:width\" content=\"1425\" \/>\n\t<meta property=\"og:image:height\" content=\"836\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"5 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.bbrown.com\\\/us\\\/insight\\\/financial-literacy-series-2-dont-spend-more-than-you-make\\\/\",\"url\":\"https:\\\/\\\/www.bbrown.com\\\/us\\\/insight\\\/financial-literacy-series-2-dont-spend-more-than-you-make\\\/\",\"name\":\"Financial Literacy Series #2: Don\u2019t Spend More Than You Make - 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