The composition of spending can be different every month. The benefit of the 50/30/20 rule is that no one category is expected to be static. All that matters is that your spending stays within three main categories: Needs: 50%, Wants: 30%, Savings: 20%. The easiest budget rule, the 50/30/20 method is indifferent to your exact spending on electricity vs. Don’t worry if it takes a little trial and error! Option 1: 50/30/20 Budgeting Methodīest for: People who want a budget, but also want to keep things simple. Consider your personality and choose the one that sounds most attractive to you. We’ve summarized three of the most popular methods below that will teach you exactly how to make a budget plan. There are many budgeting methods, each of which has its merits. Here’s how to make a budget that works for you, so you can stress a little bit less about money. The only requirement of a good budget is that it helps you get conscious of your spending - and live within your means. In fact, a good budget is flexible! It knows that your life is ever changing and helps you prepare for that reality. Whether you want to get out of debt, save for retirement, or afford that luxury vacation in Cabo, there is one thing you know you have to do:Ĭreating a budget doesn’t have to be scary or overly restrictive. This guide is going to walk you through, step by step, how to make a budget that you can actually stick to. If a purchase or signup is made through one of our Partners’ links, we may receive compensation for the referral. Our number one goal at DollarSprout is to help readers improve their financial lives, and we regularly partner with companies that share that same vision.
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