For Americans who feel overwhelmed by the prospect of budgeting, the 50/30/20 method could be the answer. 50% of income goes to rent, groceries, and bills. 30% goes to vacations, nights out, and other discretionary expenses. 20% goes toward debt first, then savings. This simple method allows you to divide each paycheck into three categories. It’s a big help for budgeting if you have an irregular income or more than one job, as well.
Only 40% of Americans even use a budget. Without a plan for your money, it can be impossible to understand where it’s going and how to build savings for the future. Budgeting may seem restrictive or complicated, but there are plenty of options that keep things simple. The most important part of any budget is its usefulness. If your current budgeting plan isn’t working, it’s time to switch to one that’s more intuitive and comfortable. Anyone with a smartphone can access a number of secure and free apps to help keep spending on track and raise awareness of where the money goes after payday.
Of course, part of maintaining a budget is controlling debt. Learning to live on less money than you make or deciding to make more money is an important step on the journey to financial fitness.
