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What is 50/30/20 and why do you need it?

The 50/30/20 Budgeting Rule is a great concept for anyone who wants to get a handle on their money. It basically splits your money up into three areas: needs, wants, and savings. Under the rule, 50% of your money should go towards needs, 30% towards wants, and 20% towards savings, so a person who makes $1,000/month would have $500 go towards needs, $300 towards wants, and $200 to savings. Simple enough, right? There are a couple of challenges with this: 1. How easy is it to determine what’s a need and what’s a want? 2. Where do I calculate this?

FitFin makes these challenges easy for you (or easier, we should say). First, we tweaked the rule a little bit so that 50% of your take home pay goes to fixed costs (rent, mortgage, phone bill, etc.). These expenses typically stay the same each month with maybe just a little fluctuation. Then 30% goes towards your variable spending (groceries, going out to eat, entertainment, etc.). These things can vary each month and even be a little unpredictable, so FitFin helps by giving you spending tools to help you get a handle on this unpredictable area.

The best part is that FitFin helps guide you through the entire process of setting up your budget, and automatically calculates your numbers towards the 50/30/20 Rule! The first thing you do when you sign up is enter your take home pay, then your fixed costs. Notice the second number (2400) in the left image below, then the percentage behind it. FitFin automatically calculated that $2,400 is 48% of $5,000.

Then FitFin takes it a step further on the variable spending page (right image below) by completing the calculation for your day-to-day spending. This gives you a complete picture of what you can spend. Notice at the very bottom of the right image a leftover percentage of 20%. This is automatically calculated by the numbers entered in the system based around 50/30/20. You may or may not hit the 20%, but this will give you a guide of where you stand versus the model.

 

 

And if your numbers aren’t where they need to be, FitFin gives you a breakdown of your spending with our Spend by Product and Spend By Store features.  These allow you to see EXACTLY where your money goes down to the specific product level (a.k.a. I spend HOW MUCH on Twinkies???). Here’s an example of what these both look like:

 

 

And finally, to help you with your spend control, FitFin gives you spend-predictive shopping lists that tell you what you’re going to spend BEFORE you shop. This is proactive budgeting, not reactive like most budgeting tools out there.

 

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To learn more and to download the iOS or Android app for free, go to our website at www.fitfin.com,

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5 Ways to Save Money on Entertainment

Many financial experts recommend that we spend 10% or less of our monthly income on entertainment and leisure activities. These can include going out to eat, getting a pedicure, going to the movies, etc. So for a family that nets $4,000.00 a month, for example, that would mean that they would need to spend $400.00 or less per month to stay within that recommendation. But how doable and realistic is this? Well before we know how doable it is, we need to get an idea of how much we’re spending in these areas now. FitFin can help with both tracking and setting up the budget. You may be surprised how much you’re spending, and how simple behavior tweaks can make big positive impacts.

Here are some ideas on how to trim expenses in this area while still enjoying life:

  1. Eat at home – It’s ridiculous how much money we spend when going out to eat. A family of four can easily spend $50.00 or more at even a fast food restaurant. I know how fun it is going to eat, so one idea to tweak this expense is to drink water instead of expensive soda or beer (have that beer when you get home).
  2. Negotiate your cable/satellite bill – This can save you big bucks! In fact, according to Consumer Reports, people who were surveyed about negotiating their bill had great results! Twenty-four percent of people saved up to $50 and seven percent saved over $50 each month! It’s worth a 10 minute call to see what you can get, and companies are much more willing to negotiate now that cheaper streaming options are easily available. And the more you do it, the better you’ll get!
  3. Entertain at home – If you have a circle of friends who like to go out, consider having “a night out” at a friend’s home and rotating every month. This can be as simple as having a game night, watching the playoffs, etc. This is also great if you have kids, as it allows them to play with other kids.
  4. Dust off those old board games – If you’re like most families, you probably have a junk room or a closet filled with old board games. Why not pull them out and get them back in the rotation? In fact, start a family game night once a week! You’ll be amazed at how much fun you and your family will have!
  5. Google “free things to do in ______” – Have you tried this? Just type the phrase into Google, Bing, or whatever search engine you use and put yours or a neighboring town. You’ll be amazed at some of the cool things you can find in your hood!

Give a few of these things a try and see what it can do for both your relationships and your pocketbook. And if you haven’t downloaded the FitFin app yet (shame on you!), you can do so at http://www.fitfin.com or by searching FitFin in the App Store or Play Store. Enjoy!

Strategic Shopping by Store

In the months since the new FitFin app launched, I’ve had fun leveraging the data on my receipts to spot-check how much items cost at different stores. And I’ve been surprised in several instances. For example, I buy a 3-liter bottle of Ocean Spray Cranberry Juice every week, and that bottle costs $5.28 at Walmart. What was surprising is that the exact same product costs $4.19 at Target! Even more surprising is that the exact same product costs $6.39 at our local Kroger grocery store! If I consistently bought that item at Target each week, I would save $56.58 in a year on that one product versus what I spend at Walmart. And I’d save $114.40 buying it at Target versus buying it at Kroger. And that’s just on one product!

Other items were just as surprising. For example, we buy a lot of Dial antibacterial hand soap, and we’ve found that it costs $1.69 at Target, $1.47 at Walmart, and $1.29 at our Kroger grocery store. However, it’s often 10 for $10 at Kroger. Since we usually buy about eight at a time, by intentionally purchasing it at the Kroger store, we save $3.76 when buying it there vs. Walmart, and $5.52 vs. Target. And Oscar Mayer Turkey Bacon costs $2.98 at Walmart and $3.29 at Target. Since we buy three at a time, we’re saving $0.93 just by buying it at Walmart.

Now I’m not saying that it’s always practical to drive all over town each week to buy different products at different places, but I am now conscious that if I’m at a certain store, to buy some of those products that have been highlighted as cheaper by FitFin.

To compare prices within the app, just click on the My Items icon in the footer menu, then go to Item Search and search for that item name. Note that in order to maximize this tool’s effectiveness, it’s best to rename item names since they’ll most likely have odd/different names on each store’s receipt. For example, that bottle of cranberry juice is named “Ocean Spray” on the Target receipt, and “100 CRANBRY” on Walmart’s. For consistency, I rename them the same (it literally takes two seconds to rename them once I’ve done it once because it pulls up names from memory).

As you can see by the three examples I’ve shown, by being strategic with where I buy products, I can save a pretty decent chunk of change. And that’s just three items!

Check out how this and other cool features work by going to http://www.fitfin.com, and download either the iOS or Android app and start strategically saving!

New year, new way to manage your spending

I know that using the new year as a metaphor for a new beginning is a bit cliché, but there may not be a better time to start to get a handle on your finances. If you’re like most of us, you probably overspent during the holidays, so financial stress may be on the brain. That’s probably reason enough for you to at least think twice about spending, but it’s also a perfect time because the new year is the start of a new taxing period. It’s also the time when health insurance deductibles start over, so you might be spending more on doctors visits and other health-related situations at the start of the year.  All these things can lead to the need for having more day-to-day cash at hand.

FitFin can help you with that because we help you put your money into three buckets: Your take home pay after taxes, your fixed costs (mortgage, rent, etc.), and your variable spending (groceries, going out to eat, etc.). By identifying the first two, it helps you calculate your “allowance” so that you know what you can spend on your day-to-day variable expenses. FitFin also uses the 50/30/20 budgeting rule, and as you’re calculating your buckets of money, FitFin automatically checks your percentages against the 50/30/20 model. Quick refresher of 50/30/20: 50% of your take home pay should go towards fixed costs, 30% towards your variable spending, and 20% towards saving and/or paying down debt.

Once you set up your budget, you then simply start tracking your spending by manually creating expenses (which takes about 10 seconds) or by taking pictures of your receipts. FitFin breaks down your receipt data to not only tell you what you spent at the macro level (i.e. $100.00 at Walmart), but it also tracks what you spent at the individual item level so that if you ever need to cut back on spending, you can see exactly where your money goes! You can also compare prices for the things you buy at different stores!

And since you’ll now know what you spend for a box of Cap’n Crunch at Target, you can actually take that information to build a spend-predictive shopping list.  So, for example, if that box of cereal costs $3.99 at Target, you can put the item name and it’s price right into your shopping list, so that each item you put on your list has a price that will tally up an expected spend total. Then you can check that against your budget in real-time, before you even go to the store.  This is proactive budgeting!

Check out our How It Works page on our site for more detail. Now is a great time to give FitFin a try!

Do you know what you’re spending?

According to a recent study by the Center for Financial Services Innovation, almost half of Americans spend more than or equal to what they make each month. That leaves very little wiggle room for emergency savings, let alone long-term financial planning.

Do you know where you fall into this mix?  Many people don’t know because they don’t track their spending. CNBC estimates that only one in three people do this.

Spend tracking isn’t difficult.  All it takes is a little discipline and a few seconds.  Spend tracking with FitFin can be done in two ways: 1. By entering a manual expense, which takes about 10 seconds, and 2. By taking pictures of your receipts, which takes about 20-30 seconds. Entering manual expenses will allow you to track things at a macro level (i.e. I spent $153.80 at Walmart), while taking pictures of your receipts will allow you to track at both a macro and a micro level (i.e. I spent $153.80 at Walmart and $19.96 of it was on k-cups, $14.98 on a new basketball, etc.).

When tracking at the micro/product level, you’ll be able to see exactly where your money goes.  This comes in handy when you need to cut $150.00 from your monthly spending. You can simply go to your FitFin app and look at your Spend By Product report to determine where to make cuts.

To learn more about what FitFin can do, check out our “How It Works” page here.

Americans still aren’t budgeting

According to a 2017 study done by U.S. Bank, only 41% of Americans use a budget.  That means that almost 60% of us don’t have a spending plan. And for those 41% who do budget, I often wonder how much they actually review it.

FitFin’s budgeting feature is unique because your budget naturally becomes a part of your daily routine since it’s integrated into your shopping routine. You’ll see it several times a week because each time you use your shopping list or access your receipts, the first thing you’ll see is your budget.

FitFin also uses the 50/30/20 rule of budgeting, and it’s automatically built into the tool! What’s 50/30/20, you ask? There are different variations of the rule, and FitFin’s philosophy is that 50% of your take home pay (after taxes) should go towards your fixed costs (mortgage, rent, car payments, etc.), 30% towards your variable expenses (grocery, dining out, entertainment, etc.), and 20% towards savings and/or paying down debt.

New users to FitFin can set up their comprehensive budget in 5-10 minutes, and FitFin automatically calculates your percentages of fixed costs to your take home pay, then does the same for your variable expenses to give you an idea of how you stack up against the 50/30/20 rule.  This video shows you the process.

And remember that FitFin is a unique budgeting tool because it’s PROACTIVE. FitFin’s shopping lists actually predict what you’re going to spend and allow you to check that prediction against your budget in real time, before you shop.

Check us out at fitfin.com.  From here, you can learn more about how the app works, download our Android and iOS apps, watch our how-to videos, and much more!

Don’t throw away that receipt!

Okay, I admit it . . .  receipts are annoying. They clutter up our tables, fall onto the floors of our cars, and are generally a pain.  But think about all of the great information that’s on a receipt! Receipts can tell us when and where we shop, but with FitFin, they can also tell us EXACTLY what we buy.  Over time, that can give you a deeper level of insight into your spending. All this is done by simply snapping pictures of your receipts.  How easy is that?

FitFin has special technology that allows for receipts to be broken down to the product level so you know what you bought and how much it cost, which you can then track against your overall budget. But it does much more than just track the total amount spent.  It also helps you track how many times you purchase individual products, how much your aggregate spend is for those products over time, and it also lets you know where products are cheapest! Want to know if the coffee you’re buying at Walmart is really cheaper than Target? FitFin can help with that!

FitFin also stores receipts, so that you no longer have a George Constanza wallet or a desk that looks like Dunder Mifflin exploded on top of it. Once a digital image of a receipt is stored inside the FitFin app, you can easily retrieve it by store name, date, receipt amount, or even by a keyword on the receipt! So let’s say you always buy groceries at Walmart, but one time you bought a new smart TV.  You can tag that receipt so that if you need to find that one Walmart receipt with the TV purchase on it, it’s as simple as searching it by word.  And you have the power to rename the keyword so that if the smart TV you bought actually reads SMRTTV or something funky on a receipt (as is sometimes the case), you can call it whatever you want so it’s easy to find.  How cool is that?

And it’s all as simple as snapping a picture of your receipt! Check out this video that shows the process in detail: https://www.youtube.com/watch?v=TFcXeZLuaW4&t=42s

Download FitFin on Android or on  iOS.

Happy snapping!