#Personal budget examples how to#

Savings are an important part of any balanced monthly budget. Get ideas for cutting costs on food, utilities, insurance or commuting. Why? Putting too much money into your Needs category could mean you run short of money for Savings and Wants. Spending more than 50% on Needs? Consider trimming some fixed costs. Monthly income ($3,000) x 0.50 ( 50%) = $1,500 (target Needs budget)Ī good goal, then, would be to spend no more than $1,500 per month, or 50% of your available monthly budget, on required expenses. For example, if your after-tax income is $3,000, your Needs budget is $1,500. Transportation (including commuter passes, tolls and gas).Food (groceries only eating out goes into the “Wants” category).Insurance (including home/renters, car and health).Utilities (water, garbage, electricity, gas, phone).This Needs budget bucket includes required monthly expenses: In addition to that net monthly paycheck, income includes any money from other sources:Īdd up all of money sources. This is the money you have available to spend, after taxes. Many financial experts-and lots of “regular people”-now use this method.

This balanced way of budgeting, often referred to as the “50/20/30” approach, was popularized by Harvard bankruptcy expert and now-Senator Elizabeth Warren (D-Massachusetts) and her daughter, Amelia Warren Tyagi.

#Personal budget examples how to#

With this minimalist guide on how to make a budget, just split your monthly income into 3 simple buckets, or budget percentages: It can help you save money toward other exciting things, like vacations, holiday gifts and the big one- college tuition.īetter yet, a balanced budget is pretty easy to create. A balanced monthly budget can do more than just help you get by. When it’s done in a balanced way, budget planning can be quite freeing and can lower your stress level about money. It brings to mind complicated spreadsheets, mind-numbing math and-perhaps most irritating of all-lots of seemingly random spending restrictions. “Budget” is a simple little word, but it can strike fear in almost anyone.