Whether you’re taking charge of your finances for the first time or you’re a seasoned budgeter looking for extra insight, seeing your full financial picture is the best way to determine how to grow, save, and achieve your financial goals.
*These budget structures are intended as a tool.
60%: Committed Expenses
Source: Richard Jenkins, “A simpler way to save: the 60% solution?,” MSN Money
20%: Savings & Debt Payments
Source: Elizabeth Warren and Amelia Warren Tyagi, “All Your Worth: The Ultimate Lifetime Money Plan”
30-45%: Living Expenses
Source: Dave Ramsey, “The Total Money Makeover: A Proven Plan for Financial Fitness”
**Monthly Net Income is the amount of money that ends up in your account once any additional expenses are removed from your paycheck (or other income source). These could include taxes, 401(k), health care, life insurance, dependent care, flex spending, wage garnishment, etc.
Make a breakdown to track your current spending and where you can adjust to meet your budget goals.
Where can you cut back (not out)?
Where can you compromise?
If you don’t have a lot of wiggle room, take a hard look at your bigger budget items.
Is it time to move to a lower-cost housing situation?
Do you need to trade in your car for something economical?
Unexpected life events happen to everyone—and not being prepared can be harmful to your financial position, yourself, and even your family.