![]() If you’d like to keep your budget at your fingertips, check out these budgeting apps: There are numerous free budgeting tools online, but you can also create a simple budget spreadsheet. Budgeting Basics Step 4: Track Your ExpensesĪs you progress through the month, keep track of your actual expenses and make sure they align with the budget estimates you laid out at the beginning of the month.īudgeting apps make it easy to track your expenses.It might be cutting eating out, but it could be downsizing your house or car if a drastic cut is needed.ĭon’t know what financial goals to work toward first? Talk to one of our financial advisors. If your budget isn’t allowing you to accomplish these goals as fast as you would like - or at all - you may need to make changes. Aim to save 15% of your income for retirement.Īs with all financial planning, your budget should be about accomplishing your financial goals, and these guidelines help with some of your biggest goals: getting out of debt, owning a home and saving for retirement.If you don’t own a home, you may want to work toward saving for a down payment.Your rent or mortgage payment should equal 25 - 30% of your income.Focus on eliminating debt, starting first with the loans with the highest interest rates.Work to build an emergency fund that could cover your expenses for three to six months.How much rent can you afford? How much money should you put toward retirement? The following are budgeting guidelines for a healthy bottom line: When you’re finished, there shouldn’t be any money left - your whole income should be assigned to expenses, savings or financial goals. ![]() Go down your list and assign values to each expense. ![]() Some expenses, like your rent or mortgage, are necessary, but they don’t fluctuate from month to month. In this budgeting method, 50% of your income goes toward needs, 30% toward your wants and the remaining 20% is allocated to savings or debts. When you understand the differences between a “need” and a “want,” budgeting your monthly income becomes easier.Consider trying the 50-20-30 budget rule. You’ll need to determine which expenses are necessary, and which are optional. Budgeting Basics Step 3: Assign Income to ExpensesĪs with most things in life, making a monthly budget is all about choices.Leave room in your budget for unexpected expenses that may arise throughout the month - consider opening a savings account to put money away for unexpected expenses so that they don’t derail your monthly budget. You may have to pay an HOA fee, buy your kid's sports gear or pay for continuing education to maintain a professional certification. When creating a monthly budget, try to account for as many expenses as possible from month to month. Keep in mind, though, that every person is different and so are his or her monthly expenses. You’ll want to include everything you plan to spend money on, such as: Now that you’ve established your total income, you’ll need to come up with a complete list of expenses for your upcoming month. Budgeting Basics Step 2: List Your Expenses.Always work with a tax professional to ensure you effectively pay for taxes. ![]() For the sake of simplicity we’re discussing an individual income, but if you’re married you’ll want to account for your partner’s income as well. For example, if you earned $3,250 in post-tax income from your primary job, and also earned $1,000 a month in untaxed side work, you would have a total of $4,000 in post-tax income after applying a 25% tax rate* to the $1,000 in extra income. If any of your income is earned without taxes already withheld, you should account for this when you determine your monthly income. This should be net income from all sources, including your primary job and any additional income you earn on the side. You should start your budget by finding your monthly, post-tax income.
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