If there is one thing you should be doing to manage yourmoney and ensure you have a fabulous life, it is budgeting. Budgeting is a process by which you list outall the bills and expenses you spend on a monthly basis so you know how muchmoney you spend each month. This allowsyou to easily visualize where your money goes and gives you an idea of how muchyou have left to put towards debt, save, or play with. Without knowing where you lie financially,you can’t plan for the life you want to live.
Budgeting Programs
There are many different types of budgeting programs outthere. A lot of different advice,too. Sometimes simpler is better. I developed my own budgeting program yearsago to help me keep track of all my bills and see what I have left over at theend of every paycheck. It is easy to useand has served me well.
Most programs out there use a monthly approach whereas I usea weekly (or per paycheck) approach. Amonthly budget never worked well for me as far as scheduling my bills andknowing when I would have extra funds to apply towards debt or something morefun like a vacation. I have always donebetter planning for each paycheck whether it was every two weeks or, now,weekly.
This allows me to easily account for weekly expenses likegroceries and gas and also know exactly how much I will have to put towardsdebt or savings. It also puts me in aposition to automatically put that extra into savings or towards a debt on theday I receive my paycheck rather than wait to see what is left at the end of theweek. This particular budget may not befor everyone, but I am sure it will work wonderfully for a number of people outthere.
Below you can download the templates I use forbudgeting. It will take you an hour ortwo to get it set up.
Bills List
In the first template, you will list every bill andmiscellaneous expense you know you spend each month in order of the day you paythem. Even if it is a small amount like$9.99 for Netflix or something, enter it.Every. Single. Bill. You willneed to enter the amounts as a negative number.For example:
Check Plan
The other template is for your paycheck planning. In this template, you will start plugging in the bills and expenses due that week. I have set these up so you can easily copy and paste from the Bills List to the Weekly Check Plan and the check plan will keep a running total of what is left. You will need to do a little setup with the Weekly Check Plan such as plugging in what your pay is each week and your initial numbers for the most normal weekly expenses like food and gas. You can also add a line for savings or other “weekly” items, if you would like. From there, you will want to copy this initial setup to other tabs and label them for each date of your paycheck. Here is an example of the Weekly Check Plan:
Once you get these initial setup done, it is super easy togo in and plan out your paychecks monthsin advance. I usually do 2-3 monthsworth. I don’t like to go too far intothe future in case something changes with our pay or bills. That way I don’t have to edit too many of theones I have already planned.
You can now see where your money is going each week and ifyou will have any left over to use for savings, fun things, debt, etc. For example, if I have a week where I have$100 left, then I will go ahead and plan to put that towards a credit card orsavings ahead of time so when I get to that week, I already know what the planis.
Video Example
As a side note, I save up my rent/mortgage payment throughoutthe month. So, if I find a week wheretoo many bills are due and I don’t have enough to cover everything, I’ll tweak myrent/mortgage savings so I am pulling more from another week and less from the weekin question.
FYI…I know the colors may be kind of boring but I have found that they are the easiest on the eyes while planning.
To download the program, enter your information below. Both templates, The Bills List and the Check Plan, will be sent to you. Please let me know if you have any questions or comments.
The Fab Life Budgeting System
Subscribe below for your free copy of The Fab Life Budgeting System!
Those will become part of your budget. The 50-30-20 rule recommends putting 50% of your money toward needs, 30% toward wants, and 20% toward savings. The savings category also includes money you will need to realize your future goals.
But the exact breakdown between “needs,” “wants” and savings may not be ideal for everyone. If you're behind on your retirement savings or have a lot of credit card debt to pay down, you might want to allocate more than 20% of your take-home pay to that category.
50/30/20 rule: One popular rule of thumb for building a budget is the 50/30/20 budget rule, which states that you should allocate 50 percent of your income toward needs, 30 percent toward wants and 20 percent for savings. How you allocate spending within these categories is up to you.
How do you figure out a budget? that works for you. We recommend the 50/30/20 system, which splits your income across three major categories: 50% goes to necessities, 30% to wants and 20% to savings and debt repayment.
So the average 30-year-old should have $50,000 to $60,000 saved by Fidelity's standards. Assuming that your income stays at $50,000 over time, here are financial milestones by decade. These goals aren't set in stone. Other financial planners suggest slightly different targets.
making $4,000 a month using the 75 10 15 method. 75% goes towards your needs, so use $3,000 towards housing bills, transport, and groceries. 10% goes towards want. So $400 to spend on dining out, entertainment, and hobbies.
Are you approaching 30? How much money do you have saved? According to CNN Money, someone between the ages of 25 and 30, who makes around $40,000 a year, should have at least $4,000 saved.
If the 50/30/20 budget was once considered the golden standard of budgeting, it's not anymore. But there are budgeting methods out there that can help you reach your financial goals. Here are some expert-recommended alternatives to the 50/30/20.
It may not work for everyone. Depending on your income and expenses, the 50/30/20 rule may not be realistic for your individual financial situation. You may need to allocate a higher percentage to necessities or a lower percentage to wants in order to make ends meet. It doesn't account for irregular expenses.
Millionaires spend most of their lives sacrificing temporary pleasures for long-term success. These decisions allow them to do things like save for retirement and college, and build up a large down payment for their dream home. They realize that instant gratification is fun—but delayed gratification is so much better.
“Your most powerful wealth-building tool is your income. And when you spend your whole life sending loan payments to banks and credit card companies, you end up with less money to save and invest for your future.
How much should you save each month? For many people, the 50/30/20 rule is a great way to split up monthly income. This budgeting rule states that you should allocate 50 percent of your monthly income for essentials (such as housing, groceries and gas), 30 percent for wants and 20 percent for savings.
It may not work for everyone. Depending on your income and expenses, the 50/30/20 rule may not be realistic for your individual financial situation. You may need to allocate a higher percentage to necessities or a lower percentage to wants in order to make ends meet. It doesn't account for irregular expenses.
The 40/40/20 rule comes in during the saving phase of his wealth creation formula. Cardone says that from your gross income, 40% should be set aside for taxes, 40% should be saved, and you should live off of the remaining 20%.
Puts off repayments - This budgeting system does not leave a lot of room for paying off any debts you have accrued. Unless you count your debts into your 50%, you only have 20% of your budget to spend on savings and debt repayment. This means if your debts outweigh this you won't be able to make any savings.
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Introduction: My name is Jamar Nader, I am a fine, shiny, colorful, bright, nice, perfect, curious person who loves writing and wants to share my knowledge and understanding with you.
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