005 | How to Budgeting in 4 Steps?
Do you ever feel like your money is slipping through your fingers? Like, you're working hard, but you're not getting ahead? If so, you're not alone. But don't worry, there's help!
If you're in your 20s or 40s and looking to get your finances in order, you're in the right place. This blog post is all about how to manage your budget planner for financial freedom success.
I know what you're thinking: "Budgeting is so boring! And I'm terrible at it!"
Budgeting is the key to financial freedom. It's the process of tracking your income and expenses so you can make sure you're spending your money wisely.
But budgeting doesn't have to be boring or complicated. In fact, it can be pretty fun, once you get the hang of it. And in this blog post, I'm going to share my top 4 tips for managing your budget planner
What is a Budget Planner?
A budget planner is a tool that helps you track your income and expenses so you can make informed financial decisions. It can be as simple as a notebook or as complex as a spreadsheet or budgeting app.
Budgeting is a skill that anyone can learn, but it can be challenging at first. That's where a budget planner comes in. A budget planner can help you.
You don’t need to be a certified financial planner to do so at all. Budgeting, especially for your own money, is a very simple task to do, and it’s fun when you see where your money goes, how it works, and finally, you budgeting today is the foundation for your future life long.
Available Money Rules to Consider
Money Budgeting is important because it can help you reach your financial goals and live a more financially secure life. By following the money rules and budgeting tips above, you can create a budget that works for you.
Here, we’re sharing with you 3 potential ways to allocate your fund, say a month;y basis if you’re getting paid with a salary. Be sure to check it, customize it, and you’re going to succeed in your financial budgeting.
What is the 50-30-20 Budget Rule?
The 50-30-20 budget rule is a simple and straightforward budgeting method that can help you reach your financial goals. The rule states that you should divide your after-tax income into three categories:
50% for needs: These are expenses that are essential for your survival and well-being, such as housing, food, transportation, and healthcare.
30% for wants: These are expenses that are not essential, but that you enjoy, such as entertainment, dining out, and travel.
20% for savings and debt repayment: This is money that you should set aside each month to reach your financial goals, such as saving for a down payment on a house, paying off debt, or retiring comfortably.
The 50-30-20 budget rule is a good starting point, but you may need to adjust the percentages to fit your individual circumstances. For example, if you have a lot of debt, you may need to allocate more of your income to debt repayment. Or, if you are saving for a down payment on a house, you may need to allocate more of your income to savings.
What is the 30-20-10 Budget Rule?
The 30-20-10 budget rule is similar to the 50-30-20 budget rule, but it allocates a slightly higher percentage of your income to savings and debt repayment.
30% for needs: These are essential expenses that you must pay each month, such as housing, food, transportation, and utilities.
20% for discretionary spending: These are discretionary expenses that you can choose to spend your money on, such as entertainment, dining out, and new clothes.
10% for savings and debt repayment: This money should be set aside for future goals, such as retirement, a down payment on a house, or paying off debt.
The 30-20-10 budget rule is a simple and effective way to manage your money and achieve your financial goals. By following the tips above, you can make the most of this budget rule and reach your financial goals sooner.
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What is the 70-20-10 Budget Rule?
This budget rule is a good starting point for everyone, but you can adjust the percentages to fit your individual needs and goals. For example, if you have a lot of debt, you may want to allocate more of your income to debt repayment. Or, if you are saving for a down payment on a house, you may want to allocate more of your income to savings.
70%: Living expenses: This includes essential expenses such as housing, food, transportation, and utilities.
20%: Savings and debt repayment: This money should be set aside for future goals, such as retirement, a down payment on a house, or paying off debt.
10%: Discretionary spending: This money can be used for anything you want, such as entertainment, dining out, or new clothes.
4 Step in Budgeting for Financial Freedom
Financial freedom is the ability to live the life you want without being constrained by financial worries. It's about having enough money to cover your basic needs, as well as your desired lifestyle.
Before you’re going to set up your budget as the desired rule we’ve discussed above, let’s understand the overview budgeting steps in order to succeed in financial freedom.
Budgeting is one of the most important steps you can take towards achieving financial freedom. It helps you understand where your money is going and make changes so that you can save more and reach your financial goals faster.
01 - Understand Your Income Stream & Spending Habits
The first step for budgeting your money is to understand where your money is coming and going. This means tracking your income and expenses for a month or two.
Write down all of your income stream such as a full time job that comes in the same amount each month, and other special or varying amounts such as side hustle, gift or any other occasion that money comes to your pocket.
To understand your spending habits, It’s worth being honest to yourself. Identify which spendings are for ‘need’ or ‘want’, then you can cut down unnecessary spending finally.
You can do this understanding your income and spending habits manually in a spreadsheet like MS Excel or Google Sheets, or use a budgeting app available in both in Apple’s App Store and Google’s Play Store.
02 - Setup Your Financial Goals
Once you know where your money is going, you can start setting financial goals. What do you want to achieve with your money? Do you want to save for a down payment on a house? Pay off debt? Retire early? Once you have a goal in mind, you can start creating a budget that will help you reach it.
03 - Make Informed Financial Decisions with Money Rule
A budget is a plan for how you will spend your money. It should include all of your income and expenses, as well as your financial goals. To create a budget, start by allocating your income to different categories, such as housing, food, transportation, and savings.
04 - Create a Budget and Review Regularly
Your budget is a living document, so it's important to review it regularly and make adjustments as needed. For example, if you get a raise at work, you may want to increase your savings contributions. Or, if you have an unexpected expense, you may need to cut back on spending in other areas.
Flexibility is the Key in Money Budgeting
Life is unpredictable, and things don't always go according to plan. That's why it's important to have a budget that is flexible enough to accommodate unexpected expenses. When you have a flexible budget, you can be more confident in your ability to handle unexpected expenses. This can give you peace of mind and help you to achieve your financial goals.
