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Joanna

@joa71

Needs, wants and savings

Needs: these are those bills that you absolutely must pay and are the things necessary for survival (rent or mortgage payments, car payments, groceries, insurance, health care, minimum debt payment, and utilities).
Wants: these include all the things you spend money on that are not absolutely essential (dinner and movies out, vacations, electronic gadgets, etc.)
Savings: this includes adding money to an emergency fund in a bank savings account, making IRA contributions to a mutual fund account, and investing in the stock market.

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IDEA EXTRACTED FROM:

What Is the 50/20/30 Budget Rule?

investopedia.com

TOPICS IN THIS IDEA

Money & Investments

How to Set Up a 50/20/30 Budget

There are lots of different budgeting methods you can try to determine the best way to manage your money. But while budgeting guides might mention those methods or provide broad categories on which to focus, they don’t always make it easy to see how your budget will actually look.

twocents.lifehacker.com

The 50/20/30 budgeting method

With the 50/20/30 budgeting method:

50% of your monthly spending goes toward essentials - your home, your food, etc.
20% of your monthly spending ...

Debt payments

Debt payments may look confusing when you add it to the savings column. But the easiest way to build up a savings balance is not to have your money go toward debt. Once your debt is paid off, you can increase the savings.

Reducing your essentials

Play around with your monthly budget to see where you can reduce your monthly spending:

You could contact your internet company to get a discount.
You can clip coupons and use rebate apps to spend less on your monthly groceries.
You could set aside less for medical expenses if you have an emergency fund.

Summer S.

@summers338

5 Simple Steps to Creating a Budget That Actually Works

As a general rule of thumb, we're taught to avoid spending more than we earn. Easier said than done, especially if you don't have a concrete plan in place. That's where a budget comes in. But creating a budget that you will actually stick to can prove to be challenging.

crediful.com

Budgeting = creating a plan to spend your money

Budgeting is simply balancing your expenses with your income.

It's a plan for the coordination of resources and expenditures. When you budget your money, there’s a desir...

How to create a budget

Gather Some Financial Information: gather a detailed list of your income and expenses.
Select a Budgeting Method: figure out how you’ll budget your money to meet your most pressing financial goals.
Create Your Budget: tally up all your expenses and income to see where you stand and allocate expenses.
Execute Your Plan: you can use a notebook, pen and paper, a spreadsheet or an online software.
Reward Yourself: you can work a small percentage into your budget to treat yourself each month.

The 70:20:10 budgeting method

This method suggests that you allocate 70 percent of your income to expenses, 20 percent to savings, and the remaining 10 percent to debt.

70:20:10 may work for someone with a healthy emergency fund and minimal debt.

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Piper E.

@pipge474

The power of a zero-sum budget

There's been a lot of talk about budgeting here at Get Rich Slowly. For instance, Kristin recently wrote about her adventures using the envelope system. I wrote about the reasons your budget might be failing.

getrichslowly.org

Steps of the zero-sum budget

Determine how much you make on any given month.
List your bills: Once you determine how much money you'll make this month, figure out how much money you need t...

The zero-sum budget

Using this method forces you to “spend” every dollar that you make, by allocating all of your earnings into the different categories that your finances require.

It prevents waste and maximizes your income, with the ultimate goal of reaching zero at the end of each month.

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