checklists.oneSign in
‹ Money

First budget in one evening (50/30/20)

One sitting, your last two months of statements, and a simple split: 50% needs, 30% wants, 20% savings and extra debt payments.

15 items · 4 sections · money, personal-finance

Start this checklist

Gather (3)

  • Last two months of bank and card statements
  • Your monthly take-home payThe amount that reaches your account. If it varies, use your lowest month of the last three.
  • A sheet of paper or a blank spreadsheet with three columns

Sort what you spent (4)

  • Needs: rent, food, power, transport, insurance, minimum loan paymentsThings you would still have to pay if you lost your job.
  • Wants: eating out, shopping, trips, subscriptionsBe honest: a basic phone plan is a need, the newest phone is a want.
  • Savings and debt: emergency fund, retirement, anything above the minimum paymentsThis is the 20%.
  • Add up each column

Work out your targets (3)

  • Multiply take-home pay by 0.5, 0.3 and 0.2Example on 3,000 a month: 1,500 needs, 900 wants, 600 savings and debt.
  • Compare your actual columns to the targets
  • Needs far above 50%? Treat the split as a direction, not a testIn a high-rent city, start with what you can and take it from wants first.

Set it up tonight (5)

  • Pick the one or two wants you can cut this month
  • Cancel any subscription you have not used in 30 days
  • Set an automatic transfer to savings for the day after payday
  • Start an emergency fund, aiming for 3 months of needsBegin with one small amount. It adds up.
  • Put a 15-minute money check in your calendar for next month

Written from www.investopedia.com

Similar