Think of a budget as a plan for your money! Your budgeting strategies and budget plan shifts and evolves as your essentials, needs, and wants change over time.
Any budget you create you want to ensure you are living within your means and covering essentials, needs, and your everyday wants. Your budget should also reflect future planning and financial milestones you are looking to achieve.
→Make sure to read my 3 Savings Buckets to have to Build Your Personal Wealth! This will help you start building key savings habits for the future.
One of my favorite budgeting strategies that I use to budget my money and make sure I am using my income efficiently is to follow the 50-30-20 budget planning rule!
Budgeting Strategies: 50-30-20 Budget Plan
ESSENTIALS: 50% of Income
Essentials are bills that you absolutely must pay and are necessary for survival. 50% of your take-home should be dedicated to this bucket.
Types of Essentials:
♦ Rent /Mortgage payments
♦ Car Payments
♦ Groceries
♦ Insurance
♦ Healthcare
♦ Utilities
WANTS: 30% of Income
Wants are all the things you spend money on that are not absolutely essential. Anything in the "wants" bucket is optional
Types of Wants:
♦ Dining Out / Takeout
♦ Cable
♦ Shopping
♦ Travel/Vacations
♦ Entertainment
♦ Tech Gadgets
NEEDS: 20% of Income
This 20% of your income goes to your financial future, i.e paying down debt and building up your savings.
Types of Needs:
♦ Emergency Fund
♦ 401k / IRA
♦ Retirement
♦ Debt Payments
♦ Investing
50-30-20 Budget Plan
Now that you understand the 50-30-20 budget plan its time to do the work! Download the worksheet and start dividing your monthly income into essentials, needs, and wants to start planning your budget!
BUDGET TIP: As your craft your own budget plan base your budgets on your take-home income (i.e. after taxes!)
DOWNLOAD BUDGET PLANNER BELOW↓
