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Highlights of the Guide to Socially Responsible Investing:
• User-friendly financial worksheets
• Expert advice on navigating the money maze
• Our directory of social investment services
• Glossary for social responsible investors
• And more!
Make a Plan
Step 1: Raise your spending awareness
Knowing where your money goes is the first step to putting more of it to work for your future.
Use this personal finance worksheet to help you organize your expenses for a month.
Personal Finance Worksheet
Using this budget is easy. First enter all your monthly income and expenses in the appropriate sections. Then figure the subtotals for income (row A), fixed expenses (row B), and variable expenses (row C).
Then add the subtotal in row B to the subtotal in row C to get your total expenses and write that into row D.
Finally, subtract row D from row A to get your total discretionary income (row E). This is the money you have left over at the end of each month.
If your discretionary income is positive, that's great. You may want to add that amount to your savings, especially after you've reviewed steps three and four of this booklet. If row E is negative, then you'll want to carefully review the strategies outlined in step 2 of this booklet. Regardless, by becoming more aware of how you spend your money, you've taken a big step toward financial health!
|Take Home Pay|
|(A) Total Income|
|(B) Subtotal, fixed expenses|
|(C) Subtotal, variable expenses|
|(D) Total Expenses|
|(E) Total discretionary income|
Step 2: Rein in your spending
Now that you can see where your money goes, the next step is to take control of that spending, especially if you are in debt or have credit card problems. Here are some helpful strategies for dealing with debt and starting down the path to saving more.
Build paying off debt into the budget. Direct as much money as possible each month to pay off any debts or increase your savings. Remember to make it restrictive without being painful. If it's too hard to follow, chances are you won't.
Pay off your debts.
If you have balances on your credit cards, start with the card with the highest rate. Another option is to start with the card with the smallest balance. Any windfall money, such as a bonus, inheritance, or tax refund, should go toward those credit cards! Keep to your budget until your debt is gone.
Don't use your credit card as long as you are in debt. That just contributes to the vicious cycle of spending and making high interest payments.
Step 3: Start saving
When you get out of debt, take the same amount you were paying toward debt reduction and divert it to savings or investments. Here’s how:
Pay yourself first.
Once you are out of debt, allocate a specific amount to put into savings each month. An easy way to do this is to automatically deposit money from your paycheck right into your savings account.
Save your raise.
When you get a raise, automatically tuck the difference between your new and old paycheck into a savings account every paycheck. If you don't get used to the higher paycheck, your spending will stay at the old paycheck level and your savings account will grow!
Create an emergency fund.
If you don't have an emergency fund (an account with sufficient cash to provide you with enough to live on for three to six months in the event of an unforeseen emergency), now is the time to start saving for that. If you earn $3,000 a month after taxes, then you'll want an emergency fund of $9,000 to $18,000. An interest-bearing savings account or a money market account is a good place to keep your emergency fund.
Invest in your retirement!
If you have an employer-sponsored retirement plan [401(k) or 403(b)] be sure to use it. The money you invest reduces your taxable income, and compounds tax-free to build your retirement nest egg. Find out how to retire a millionaire in a better world
To get more information on how you can create a financial plan that works for you and the planet, join Green America today. You'll receive our members-only social investment guide, Green America's Guide to Socially Responsible Investing, which contains more detailed planning worksheets and a directory of hundreds of social investment resources.