Budgeting: three simple budgets to copy
How do I make a budget that actually works?
3 minute read
A budget is a plan for your money before the month starts. Pick one style. Do not overthink it.
1. The 50/30/20 budget. 50% for needs (housing, food, car, utilities, minimum payments). 30% for wants. 20% for savings and extra debt payments.
2. The tight-month budget. Cover the four basics first: housing, food, transportation, utilities. Then every minimum payment. Anything left goes to the cushion.
3. The get-ahead budget. Pay yourself first: 20 to 30% goes to savings and investing on payday. Live on the rest.
Free help: the CFPB has budget worksheets at consumerfinance.gov. Search “CFPB budget worksheet.”
Example
Take-home pay is $5,000 a month. On 50/30/20: $2,500 needs, $1,500 wants, $1,000 savings and debt. On the get-ahead budget at 25%: $1,250 saved first, $3,750 to live on.
Why this matters
Most people who earn well but feel stuck do not have a spending problem. They have no plan for where the money goes first.
What to do with this
- Pick one of the three budgets.
- List last month’s take-home pay and your bills.
- Set the savings amount to move automatically on payday.
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