It is good for people who want to track metrics.īest fit for: Detail-oriented people and those with high fixed expenses or who have a hard time controlling their spending. Then place each dollar of your monthly income into an allotted space so that you're left with zero (or maybe a bit of checking account surplus).īy basing next month's budget on last month's expenses and income you'll have a real-time picture of your spending and expenses.īut be warned: "This is a very hands-on budget," says Dolan. Pay yourself first by allocating the first dollars to your debts or your savings goals. Get started: Use Mint, the Personal Capital app or this personal-budget template on Google to track your expenses. From there you can work to curb expenses or set savings goals.īest fit for: People with existing hefty fixed expenses and those looking to better understand their spending. A bottom-up budget includes those costs from the beginning and shows you what you have remaining. Those expenses will be more difficult to change than curbing how many margaritas you're grabbing with friends. How it works: Rather than beginning at the top with a big picture goal, you start at the bottom with the actual costs of your daily expenses.īottom-up is the way to go for people who are already locked into some pretty big expenses, like a mortgage, fixed transportation costs or costs associated with having children including diapers and child care. Get started: Use an app like Level Money to create categories for spending. With a top-down budget you'll be able to arrange your spending and saving to reach the goal.īest fit for: Big-picture people and those with specific saving goals. The categories are more specific than the 50/30/20 budget like: groceries, clothing, internet, gas, dinners out.īut you are still focused on big ideas like wanting to retire with 85% of your income at 60 or attending 13 weddings this summer. How it works: You are the CEO of "You Inc.," setting the percentages of your take-home pay devoted to the priorities you choose. Get started: Use this Google template to begin. The 20% for debt payment and savings is your "get ahead" bucket.īest fit for: First-time budgeters and young people with straightforward expenses. The 30% is for obvious extras like dinners out, new shoes and travel, but also your cell phone plan, cable and subscription plans.
The 50% to cover essentials should include housing, food, utilities and transportation. The hard part for some beginners, says Tyler Dolan, a certified financial planner who helps people manage their financial lives at Society of Grownups, is determining a "need" from a "want." How it works: The method is simple: 50% of your take-home pay goes to needs, 30% to wants and 20% goes to debt and savings. Here are six common budgets, how they work and who they fit best.
0 kommentar(er)
