This should account for everything from nights on the town and takeout, to hobbies, leisure travel, and subscriptions. 30% on Wants: The next 30% of your spending goes toward your desires, the things that keep you happy.50% on Needs: Allocate half of your monthly after-tax income to your needs-things like rent or mortgage payments, groceries, and utilities.Using this rule, you can aim to spend your money in the following fashion: The 50/30/20 rule is one of the most common-and straightforward-systems for monthly budgeting. If you’re unsure of how to initially structure your budget in a way that leads to savings, some common budgeting systems might come in handy. To help you do just that, use these techniques to help allocate your budget toward the right mixture of expenses. Once you have more finalized income and expense numbers to work with, it’s time to work toward a sustainable plan that not only accounts for your spending but makes sure you’re doing that spending in the right places and on the right things for you. Monthly Budgeting Techniques and Goal-SettingĮven if your expenses are lower than your income, you’ll likely want to make some adjustments, too.
If your budgeted expenses are greater than your income, then you’ll need to identify areas where you can cut spending.
If your income varies from month to month, use an average based on the last year or start with your low-earning month of that year as a baseline.
Calculate Your Monthly Income: Start with your monthly after-tax income or “take-home” pay as your spending limit for each month.Make better decisions backed by data and insights Learn More