Now that you have figured out your house budget, you should know EXACTLY how much it costs for you and your family to live per month. You should then subtract that from your total income. The remaining pot of money goes into two separate budgets; investment budget and personal budget.
Why do we need an investment budget? Shouldn’t we just go through the month and see what money we have left, and then invest that? No. Big No! You have to pay yourself and your family first. Your investment budget is just as important as your house budget. As soon as you get paid you should be putting your money into your investments. Even better, have the money automatically withdrawn from your account. That is the absolute best way to save and invest.
This is my total house budget and investment budget. This is only the money from my $2500 allotment into my house account. I have multiple other accounts that also have income coming in. Also, this does not include Kris’s income, rental and room rental income, and my second job income. Let’s review what I invest in currently:
- TreasuryDirect: These are savings bonds for myself and my kids.
- Silver: I usually invest $160 in silver per month, however, the prices are extremely high right now. I will pause this until the price is more reasonable.
- Fundrise: Fundrise is how I invest in real estate outside on owning properties. They pay a great dividend.
- Stock Market: I transfer $600 into my Wells Fargo brokerage and invest in ETFs and dividend-paying stocks.
- Stash: Stash is my favorite way to invest. You slowly invest in your favorite stocks and ETFs. I have it broken down by week.
The total amount invested through this budget is $1420. Keep in mind, my wife also invests $800 into her investment budget. As more money starts to flow in for the month, we can decide to invest more or spend some on the house. It is really our option. The good part is that we already know we have invested $2000 for the month.
Ensure that your investments are well diversified. As you can see, we are investing in stocks, bonds, and real estate. I am going to open a direct deposit into my high yield savings account in October 2020. That is the best way to put money into your high yield account. Always keep money on hand for emergencies and don’t try to over-invest. It will lead you to have to pull out money when times get rough. Have a savings plan and an emergency plan.
Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. Please research any investment vehicles that are being considered. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
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