And with only three major categories to track, you can save yourself the time and stress of digging into the details every time you spend. It can make it easier to reach your financial goals, whether you’re saving up for a rainy day or working to pay off debt.īy regularly keeping your expenses balanced across these main spending areas, you can put your money to work more efficiently. The 50/30/20 rule is a great way to solve that age-old riddle and build more structure into your spending habits. The basic rule of thumb is to divide your monthly after-tax income into three spending categories: 50% for needs, 30% for wants and 20% for savings or paying off debt. The 50/30/20 rule is an easy budgeting method that can help you to manage your money effectively, simply and sustainably. Take the 50/30/20 rule! The 50/30/20 rule is a simple monthly budgeting approach that advises you how much to put toward savings and living expenses each month. In fact, the best strategies to budget are frequently the most basic. What is the 50-20-30 budget rule?īudgeting does not have to be difficult, nor should it eat up hours of your time. If Your Pay Varies: If your pay varies due to tips, varying hours, and/or commissions, you can still compute an expected monthly income by adding three months of income and dividing by three. Divide this figure by 12 to calculate your monthly income. If you are paid weekly: Multiply your weekly compensation by the number of weeks in a year: 52. Then multiply this figure by 12 to get your monthly income. If you are paid biweekly: Double your take-home pay for one paycheck by the number of paychecks in a year, which is 26.
Budget planner worksheet free printable how to#
Here’s how to determine what your monthly take-home income is:
Any money that you get on a regular basis can be considered revenue for your monthly budget.
Include other sources of income, such as social security, disability, pension, child support, regular interest or dividend earnings, and alimony, when computing income. Your take-home pay is the amount of money you have available to spend or save in addition to what you may already be contributing to a retirement account at work. When it comes to budgeting, take-home pay is the only thing that matters.
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