5 Steps to a Simple Budget.
Financial wellness is a significant component of your holistic wellbeing. When you understand your finances, feel empowered to manage your expenses and debt, can save for emergencies and retirement, and make informed financial decisions; your vitality skyrockets. Starting a budget is simple. Here are 5 steps you can take now.
Calculate your after-tax income including salary, side hustles, and any other sources of income.
Allocate 50% of your income to essential expenses like housing, food, transportation, childcare, insurance, mandatory debt paydown, utilities, etc.
Allocate 30% of your income to discretionary expenses (your wants) like entertainment, dining out, shopping, etc.
Allocate 20% of your income to savings:
8-10% of savings should be allocated for near term emergencies and intermediate term goals like a home/car down payment, education or a wedding.
10-12% of savings should be allocated for retirement.
At the end of each month, tally your expenses and compare it to your 50/30/20 allocation. Adjust your budget as fits for you.
Fall in love with your healthy spending habits, recognizing that money is energy. How you treat your money is how you treat other areas of your life. Following these steps is a wonderful way to bring awareness and intention into your life.
Sabrina Custer, author
