Budgeting 101, How To Start Budgetingby Lindsay C.
So you want to start a budget. You download WellSpent but you don’t know what reasonable amounts are for certain budgets. Where do you even start?
Budgets are as personal and different as the individuals who create them. Some places you live you will have to spend a lot more on housing than other places, and if you live in the country or have to commute daily, your gasoline budget needs to reflect that. So, if you want a good jumping off point let me suggest some guidelines.
Living Expenses should take up about 50% of your income. This is the most expensive part, but it is also the most essential. Rent or a mortgage, utilities, food. Those are all things that are included in this 50%. This can obviously change around a lot depending on where you live. Your house payment maybe lower and in that case put that extra to good use and pay off debts or save it or it may have to be higher and you will have to cut back in other areas.
Financial Ties should take up about 30% of your income. This includes any tithes, student loans, car loans and credit cards. If you don’t have any debt then this percentage can go directly to savings or additional retirement contributions, paying off you house faster, or even saving for a vacation.
The last 20% of your income can go to things of your choosing. This is how you chose the lifestyle you want to live. Many people are so different in what they chose to do with their money that there is no real way to tell anyone how to budget.
Once you start a budget, it is important to understand where you are over spending or where you have extras. You can tweak your budgets as you pay attention to and learn your spending habits. Starting a budget will help you live a more confident lifestyle. You learn to control your money and not let it have power over you. Start making sure your money is WellSpent.