How To Budget

June 21, 2016

1. Consider the 50-30-20 Budget.

With this budgeting strategy, you devote 50% of your income to essential expenses, such as your rent or mortgage payment, your utilities and food; 30% to discretionary spending; and 20% for financial priorities like saving, funding your retirement, and paying down debt.

Note: If you’re weighed down by debt or have aggressive savings goals, you can adjust this budget to put less money toward discretionary spending and more toward financial goals. Likewise, if your fixed costs are less than 50% of your income, you can adjust these numbers accordingly.

2.  Use Mint to stay on course.

With Mint, you create a budget that’s easily trackable. The software compiles all your purchases and places them in categories, making it easy to stay in line with your spending limits.

 3. Attempt the zero-based budget.

This method forces you to account for every cent you have coming in each month by assigning it to a category in your budget. If your income is $2,400 monthly, your budget should equal $2,400 between needs, savings, debt repayment and discretionary spending, for instance.

According to Dave Ramsey, this gives you the incentive to make new spending plans each month as your finances fluctuate. It also ensures your budget is realistic for your income and expenses at a given time.

This method can also help you re-evaluate your expenses each month to be more critical of where your money is going and will help you catch poor habits early.

4. Think about each purchase.

Preventing an impulse purchase with this motivation hack: simply think about how many hours it took you to earn that amount.

 5. Review your budget and spreadsheets regularly.

Keep your financial situation constantly fresh in your mind. This helps to curb your desire to spend, spend, spend, ensures you know how much you actually have to spend if you need to, and motivates you to pay off debt and save more.

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