A budget allows you to have control over where your hard-earned money goes. It empowers you to be aware of how you spend and save, which can reduce financial struggles and worries.
Budgets should be tailored to your needs and life circumstances. But it doesn’t have to be difficult to make one. Here are some things to keep in mind.
Decide on your goals
Each person’s financial goals are different. Some common reasons to save more are to:
🏡 Save for a big purchase, such as a house or car
🎓 Prepare for the long-term (college, retirement, etc)
🎁 Have enough money to treat loved ones to gifts
🛑 Stop living paycheck-to-paycheck
💸 Pay off debt
Your goals may be one or several of these. Once you know what they are, be specific on the amount you aim to save and the timeline.
If you want to buy a car, your goal may be to save $30,000. If you’d like to save up for college, how many years do you have before you attend? Being specific means you’ll know how much of each paycheck you’ll need to save.
Understand your current income and expenses
List all your after-tax income, including from your paycheck, help from family, and any side hustles.
Then, look at your monthly expenses. Split them between essential expenditures (like rent and groceries) and “nice to have” ones (dining out, clothes shopping). The non-essential expenditures can be cut back if your goal is to save more.
A simple budget is the 50-30-20 rule: 50% of income goes toward essentials, 30% to the wants, and 20% toward savings.
Track your progress
A budget is not a set-it-and-forget it thing. You need to review your spending and saving habits on a regular basis to make sure you’re on track to achieve your goals. Truebill makes this step extremely easy.
Not only is creating a budget in the Truebill app simple, it offers notifications and alerts that keep you updated on how you’re progressing toward your goals.