These budgeting tips are the icing on the cake!
Striking balance in our life can sometimes be easier said than done. We all have a lot going on each and every day. From driving the kiddos to their after-school activities, taking classes on campus, or finding time to finally put away that pesky laundry, there just doesn’t seem to be enough hours in the day.
But what about balancing your finances? We all want to do all the things all the time, but our budget may not agree. In this article, we’ll explore some sweet budgeting tips to help you live a life of balance.
Strap on your apron, gather your mixing bowl, and follow this recipe. Remember, creating a budget is personal, so adjust this recipe to taste.
Living a Life of Balance
Makes 1 serving. At the start of each month, adjust any of these portions as needed.
- Income – how much are you bringing in?
- Expenses – how much are you spending?
- Transactions – how are you tracking your monthly transactions?
- For this recipe, we’ll be exploring the 50/30/20 budget rule. The idea behind this rule is to have 50% of your income go to fixed expenses, 30% for fun money, and 20% for savings and debt obligations.
- First, you’ll want to understand your net income. This is how much money you’re bringing in every month minus taxes and other employer deductions, such as health insurance, retirement, etc.
- Next, you’ll want to understand your total expenses. This is how your money is being spent and will ultimately play a large role in creating your monthly budget. To start this, determine your fixed spending by calculating your essential expenses, like housing, car payment, and utilities. Subtract this amount from your monthly income.
- Next, determine your variable expenses. These are costs that change month to month like groceries and gas. Subtract this amount from your monthly income.
- If you have financial goals, it’s important to set aside money each month towards reaching those goals. Whether you’re saving for a down payment on a new home, paying down debt, or saving for retirement, working towards your financial goals should be a piece of your monthly budget. When you determine how much you can reasonably put towards that goal, subtract it from your monthly income.
- Whatever amount you have left over and how it’s used is up to your discretion! Maybe you’ll want to treat yourself to a fun night out with friends, a special date night with your spouse, or add that money towards your financial goal.
- The key ingredient to living a life of balance is making sure you’re revisiting and reviewing your budget plan often. Creating a budget should ebb and flow with your life. For example, if you buy a new home, your fixed expenses may change dramatically. Therefore, your budget should be adjusted accordingly. If you get a new job with a higher salary, maybe you have more options for “treat yourself” money.
One of our biggest budgeting tips is to plan for the unexpected. We know life is unpredictable and unforeseen expenses can quickly derail your financial stability. To help, consider creating an emergency fund. Having this safety net will provide peace of mind and prevent you from stressing when faced with unforeseen circumstances.