![]() Overall, Mint is a good budgeting app for day-to-day money management. Free credit score and monitoring from TransUnion.Set goals and track your savings progress.Mint is smart and will learn how you place transactions into categories for the future. Finding your perfect budget balance can help you save and spend with confidence.Ĭynthia Measom contributed to the reporting for this article.One common complaint is that some transactions may be put into the wrong categories. These values can help shape your financial decisions when deciding on your budget percentages. Remember that what you include in your monthly budget depends on your own values, needs and priorities. Tips such as the 50/30/20 rule can help you hone in on your ideal budget percentages and will lead to better money management. Good To Knowīefore breaking down your budget percentages, carefully consider your spending habits and savings needs. You may have to move money around to compensate. Adapt To ChangesĪs you track your expenses, be prepared to make necessary adjustments as your financial situation changes. This can allow you to adjust your budget for more variable expenses, such as healthcare, clothing or travel. Fixed expenses are less likely to change from month to month, such as rent, mortgage, food or utilities. Make sure to take into account both fixed and variable expenses. Start by grouping expenses into the categories mentioned above. You can use a online or printable budget template or spreadsheet, or you can invest in budgeting software to help you track your expenses each month. Maybe you know how much you earn, but do you know where every penny goes? Tracking both income and expenses gives you the whole picture. This gives you a sense of your monthly cash flow. Take inventory of all of your bank accounts - including checking, savings and credit cards - to accurately identify your spending. Medical, dental and other insurance premiums.Retirement account contributions, such as 401(k), Roth IRA or 403(b).Social Security and Medicare contributions.Some common deductions from your gross pay include the following: In other words, it’s the money you’ll use to fund your budget each month. ![]() ![]() Your take-home pay, also known as your net pay, is your income after the deduction of taxes, benefits and other contributions. For example, if you allocate 15% to 20% of your net pay to your savings goal and an additional 10% to your emergency savings, that’s 25% to 30% of your net pay going toward savings, which might put a strain on your budget.īuilding a budget isn’t difficult, but it does take time. You might need to reconsider your budgeting percentages if you are also saving money for a specific goal, such as a down payment on a vehicle or home. Most experts recommend building an emergency savings fund worth three to six months’ of your expenses. Keep your emergency savings separate from your other savings to ensure you can cover unexpected events. Major appliance repairs or replacements.Emergency ExpensesĬan you cover a $1,000 emergency expense without using a credit card? Here are some examples of situations where an emergency fund is necessary. Now that you know what your monthly budget percentages should be, you can break down some of the other expenses that should be included in your budget. What Other Expenses Are Included in a Well-Balanced Budget? Transportation or auto services: 10-15%.Insurance, such as life, medical, home or auto: 10-25%.What is a good budget breakdown? Here are some guidelines on setting your budget percentages: If the 50/30/20 or 60/40 budget doesn’t seem like it would work well for you, that’s okay. The other 40% is split evenly between the following four categories: debt and long-term savings, short-term savings, retirement savings and “fun” money. With this method, 60% of your budget is focused on expenses you’re committed to each month, such as housing, food, transportation, insurance - and also other monthly reoccurring expenses, such as gym memberships and streaming subscriptions. The remaining 30% is for discretionary spending. But that doesn’t work for everyone.Īnother option is the 60/40 budgeting method. That leaves 50% for needs, including essentials like mortgage or rent and food. The popular 50/30/20 rule of budgeting advises people to save 20% of their income every month. You should set your budget percentages in a way that works best for you.
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