The most common buckets are:<ul><li>Expenses, or your needs: housing, food, transportation, clothing, insurance, childcare,  etc.</li><li>Debt - monthly debt obligations: personal loan, student loan, auto loan, and credit card payments etc.</li><li>Savings, including funds for your emergency fund.</li><li>Consider automating your retirement contributions to ensure you stick to the plan.</li><li>Wants: don't deprive yourself.</li></ul>

Allocating expenses

Scheduling your payments  (online or through your financial institution’s bill pay feature) decreases the likelihood of blowing your budget. Despite the fact that funds will be sitting into your account until the date they are due to be withdrawn, you’ll know the money is off limits for casual spending.

Online Scheduling and Online Bill Payment

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 desired outcome. And being able to track your spending should ultimately move you in the right direction towards meeting your financial goals.

Budgeting = creating a plan to spend your money

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

How to create a budget

<ul><li>you don’t have to go through the trouble of making an additional transfer</li><li>it won’t be as tempting to spend money that’s sitting in a savings account that you don’t make regular transactions out of.</li></ul>

Benefits of automated savings

Under this method, 50 percent goes to expenses, 30 percent goes to wants, and 20 percent goes to a combination of debt and savings.A person with a healthy amount of disposable income but loads of debt could probably benefit more from the 50:30:20 method.

The 50:30:20 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.

The 70:20:10 budgeting method

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.