Budget. We’ve all heard that word. However, according to a recent Gallup poll, nearly 2/3 of Americans do not have a budget!! YIKES!!
I know it can be scary to create a budget. But, I make it simple for you. Everything you need to know about creating a budget can be found right here.
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IS A BUDGET REALLY THAT IMPORTANT?
Think about the last vacation you took. Chances are you planned things about before you left. First, you decided where you would go. Then, you decided how you would get there (drive, fly, etc). After that, you determined where you would sleep and even the different activities you would do when you arrived.
Now, imagine that same trip, but without planning. It would never work, would it? Well, it could, but it would probably cause you a lot of stress.
The same is true when it comes to your budget. If you don’t have a budget, you have no idea where you need to spend your money. You never understand where every single dollar goes. Without a budget you have no control.
Before you create your first budget, get into the right mindset. Without that, your budget is destined to fail.
- Why Your Budget is About More Than Money
- Understanding Your Money Attitude
- 6 Reasons Why Your Budget Doesn’t Work — And How to Fix It
- Managing Family Finances: Tips and Strategies for a Better Financial Future
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GETTING STARTED WITH YOUR BUDGET
If you have never used a budget, you may not know where to start. You might even ignore budgeting because you don’t make much money. It’s possible you think a budget will not work if your income changes from paycheck to paycheck.
It is simple to do. You just need to know where to start.
- Why the Spending Plan is the First Step in Your Budget Plan
- Creating Your First Budget
- Learn to Budget with Irregular Income
- Creating a Workable Budget When You Are Broke
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GETTING YOUR PARTNER OR SPOUSE ON BOARD
If you are in a relationship, a budget is even more important. You need to work together to create a budget that work for both of you. Your budget will never work if you can’t agree – or more importantly – if you just hand it over to one person.
- Convincing Your Spouse That You Need a Budget
- How to Talk About Money with Your Spouse or Partner
- How to Get Your Partner on Board with Your Finances
- Being Fair When it Comes to Money
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DIFFERENT TYPES OF BUDGETS
There is never a one size fits all method to creating a budget. That is why it is important to find the right type of budget that works for you!
- The Simple Zero Based Budget
- The Half Payment Method
- Best Budget Apps
- Cash Envelope Budget
- Free Online Budget Calculator
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MAKING YOUR BUDGET WORK
It’s one thing to have a budget. It is another to follow it. Making your budget work is not always easy, but you can do it.
Having a workable budget means sticking to it and always analyzing the numbers. Your budget is never one and done. It requires continual maintenance and review to make it work effectively.
- How to Stick to Your Budget
- Annual Changes Your Budget Needs
- How to Cut Your Budget (When There Is Nothing Left to Cut)
- How Your Are Killing Your Grocery Budget
- Why You Need to Track Your Income
- What To Cut From Your Budget When Getting Out of Debt
- How to Change Your Payment Due Dates to Make Your Budget Work
- How to Get Your Budget Back on Track When You Overspend
- Tricks to Making Your Budget Work
- My Tricks to Spending Less and Saving More
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ITEMS FOR YOUR BUDGET
You know you need to budget for your living expenses such as food and housing. But, how do you do this? And, how do you figure out how much to budget for different categories? It can be overwhelming if you are new to budgeting. These articles can help you with some of those items on your budget.
- The Categories You MUST Have In Your Budget
- How Much Should I Budget for Groceries?
- The Ten Items You Are Forgetting In Your Budget
- How to Budget for a Staycation
- How to Include the FUN Stuff In Your Budget
- How to Make Both Wants and Needs Work In Your Budget
ADDITIONAL BUDGET RESOURCES
It is important that you create a budget you can follow regularly. Above I shared many tips and ideas to help you do that. Below are some additional resources you should use when it comes to managing your money
- The Cash Envelope Method
- The Budget Apps That Simplify Your Life
- Free Budget Templates (via Resources Library)
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Please note that I am not a certified financial advisor and the information shared on this site is based on my personal experiences. It is important you consult with a tax or financial professional for assistance for your financial situation.
FAQs
The 50-30-20 rule recommends putting 50% of your money toward needs, 30% toward wants, and 20% toward savings.
What should be considered when setting a budget in EverFi? ›
financial goals, current expenses, and income.
How to make a simple budget for family? ›
7 Easy steps for creating a Family Budget
- Establish a goal. Ask yourself what you want to get out of making a family budget. ...
- Choose a digital budgeting tool. ...
- Gather your financial information. ...
- Organize into categories. ...
- Calculate the information. ...
- Look for ways to decrease spending. ...
- Review your budget monthly.
The 40/40/20 rule comes in during the saving phase of his wealth creation formula. Cardone says that from your gross income, 40% should be set aside for taxes, 40% should be saved, and you should live off of the remaining 20%.
What is the 50 30 20 rule and give me an example using $2500? ›
To best use the 50/30/20 rule, balance your current income and expenses with your short- and long-term goals. Let's say you earn $2,500 per month after taxes. You'll aim to spend no more than $1,250 on necessities and $750 on wants, leaving $500 for savings and debt payments.
What is the #1 rule of budgeting? ›
The 50/30/20 budget rule states that you should spend up to 50% of your after-tax income on needs and obligations that you must have or must do. The remaining half should be split between savings and debt repayment (20%) and everything else that you might want (30%).
What are 5 major things to consider in your budget? ›
- Rent. The first and possibly biggest monthly expense to consider is your rent or mortgage payment. ...
- Groceries. ...
- Daily incidentals. ...
- Irregular expenses and emergency fund. ...
- Household maintenance. ...
- Work wardrobe and upkeep. ...
- Subscriptions. ...
- Guests.
Here are five types of income you should never include in your budget.
- Extra Paychecks. Depending on your pay schedule, some months out of the year will give you an extra paycheck. ...
- Income Tax Refund. ...
- Bonuses. ...
- Side Hustle Income. ...
- Any Other Income that is Not Permanent.
Follow the steps below as you set up your own, personalized budget:
- Make a list of your values. Write down what matters to you and then put your values in order.
- Set your goals.
- Determine your income. ...
- Determine your expenses. ...
- Create your budget. ...
- Pay yourself first! ...
- Be careful with credit cards. ...
- Check back periodically.
You can use your budget every month:
- At the beginning of the month, make a plan for how you will spend your money that month. Write what you think you will earn and spend.
- Write down what you spend. ...
- At the end of the month, see if you spent what you planned.
- Use the information to help you plan the next month's budget.
Try the 50/30/20 rule as a simple budgeting framework. Allow up to 50% of your income for needs, including debt minimums. Leave 30% of your income for wants. Commit 20% of your income to savings and debt repayment beyond minimums.
What is the easiest budget method? ›
1. The zero-based budget. The concept of a zero-based budgeting method is simple: Income minus expenses equals zero. This budgeting method is best for people who have a set income each month or can reasonably estimate their monthly income.
What is a realistic monthly budget? ›
Setting budget percentages
That rule suggests you should spend 50% of your after-tax pay on needs, 30% on wants, and 20% on savings and paying off debt. While this may work for some, it's often better to start with a more detailed categorizing of expenses to get a better handle on your spending.
What is a 50/30/20 budget example? ›
Applying the 50/30/20 rule would give them a monthly budget of: 50% for mandatory expenses = $2,500. 20% to savings and debt repayment = $1,000. 30% for wants and discretionary spending = $1,500.
Is the 50 30 20 rule outdated? ›
However, the key difference is it moves 10% from the "savings" bucket to the "needs" bucket. "People may be unable to use the 50/30/20 budget right now because their needs are more than 50% of their income," Kendall Meade, a certified financial planner at SoFi, said in an email.
What is the disadvantage of the 50 30 20 rule? ›
It may not work for everyone. Depending on your income and expenses, the 50/30/20 rule may not be realistic for your individual financial situation. You may need to allocate a higher percentage to necessities or a lower percentage to wants in order to make ends meet. It doesn't account for irregular expenses.
When should you not use the 50 30 20 rule? ›
The 50/30/20 has worked for some people — especially in past years when the cost of living was lower — but it's especially unfeasible for low-income Americans and people who live in expensive cities like San Francisco or New York. There, it's next to impossible to find a rent or mortgage at half your take-home salary.
