A lot of people want to start a budget but don't know-how. I was blessed into a family of budgeters, and because of that, I learned early on how to, so I will share tips on an easy way to budget.
Now, Senator Elizabeth Warren popularised a rule of sorts in her book “All Your Worth: The Ultimate Lifetime Money Plan.” the rule is called the 50/30/20 budget rule. Basically, the rule is to divide after-tax income, spending 50% on needs and 30% on wants while allocating 20% to savings. I don't follow this rule personally, but you can if you want to
First, you need to work out how you want to set it out. Do you want to write it down on paper or on a spreadsheet? I find spreadsheets to be the easiest, but it all depends on you and your lifestyle.
Next, work out how much you make a week/fortnight/month after tax. Really the method you use depends on how you get paid. I get monthly, so I base my budget on how much I make in a month, but if you are paid weekly or fortnightly, go off that.
List out how much you need to pay in that time frame. For example, if you are paid weekly, you would list out the week and the dates and work out what day your power, internet, rent and all that comes out and have it under that week. Every month, I have to pay $15 for Spotify and $30 for my phone etc.
Another thing to think about when you are planning out the budget is peoples birthdays, easter (if you have kids), Christmas, anniversaries and more so that you have money for gifts. It is also good to put money towards savings for things like buying a house or car, holiday or emergency fund like your car breaking down or landing up in the hospital.
as an example of how I budget, I did a mock budget so you can see how I list mine (with a different salary and expense list)
Now, Senator Elizabeth Warren popularised a rule of sorts in her book “All Your Worth: The Ultimate Lifetime Money Plan.” the rule is called the 50/30/20 budget rule. Basically, the rule is to divide after-tax income, spending 50% on needs and 30% on wants while allocating 20% to savings. I don't follow this rule personally, but you can if you want to
First, you need to work out how you want to set it out. Do you want to write it down on paper or on a spreadsheet? I find spreadsheets to be the easiest, but it all depends on you and your lifestyle.
Next, work out how much you make a week/fortnight/month after tax. Really the method you use depends on how you get paid. I get monthly, so I base my budget on how much I make in a month, but if you are paid weekly or fortnightly, go off that.
List out how much you need to pay in that time frame. For example, if you are paid weekly, you would list out the week and the dates and work out what day your power, internet, rent and all that comes out and have it under that week. Every month, I have to pay $15 for Spotify and $30 for my phone etc.
Another thing to think about when you are planning out the budget is peoples birthdays, easter (if you have kids), Christmas, anniversaries and more so that you have money for gifts. It is also good to put money towards savings for things like buying a house or car, holiday or emergency fund like your car breaking down or landing up in the hospital.
as an example of how I budget, I did a mock budget so you can see how I list mine (with a different salary and expense list)
January 2020
monthly income: 2,000
power (due on the 15th): $129
rent (due on the 3rd,10th,17th and 25th): $1200 ($300 a week)
phone bill (due on the 22nd): $35
Netflix (due on the 10th): $12
food: $400
money going into savings: $100
spending money: $124
total money in savings: $1500
And there you have it, how to budget. I hope this helped you :)
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