There are many budgeting methods, a few of which are explained here. There are also apps and software that you can use to help you with budgeting.
Choose whatever method works best for you.
You can also keep a written log, spreadsheet, or whatever other method works for you.
The important part is to KNOW what you have coming in (income) and going out (expenses) and to aim to have less going out that coming in each month.
In Zero-Based Budgeting, your income minus your expenses should equal zero (balance out). Savings goals, fun, and debt payments are included in your expenses in this method.
The goal with this method is to give every penny you earn a purpose.
How to use this method:
Pros and Cons:
The 50/30/20 Budgeting Method breaks down how much of your net pay (take home) you should put toward three separate categories:
You can try an online calculator, like this one from Nerd Wallet, to see how this may work for you
Pay Yourself First budgeting can also be called "reverse budgeting" because you prioritize your savings over your expenses.
The most common way to do this is to allocate a portion (amount or percentage) of each paycheck to go directly into your savings. Having direct deposit set up is the easiest way to do this, as it will go directly into your savings each payday without you having to do anything at all. Review your finances first to determine an amount (or percentage) you are comfortable setting aside with this method.
Pros and Cons:
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