Updated: Nov 17, 2020
“A budget is telling your money where to go instead of wondering where it went.” — John C. Maxwell
If the idea of a budget fills you with dread, that’s ok. We’re not asking you to have a huge excel spreadsheet where you track every single one of your expenses.
Here, we’re going to introduce you to a budget that is flexible, and that doesn’t involve sacrificing the things that are meaningful to you.
The 50/20/30 budget is a way of looking at your money like a pie. All the money that comes in determines the size of your pie, which you then allocate into these three categories.
- 50% gos to essentials
- 30% goes to needs
- 20 % goes to savings
What falls into each category?
It's your turn.
No, there isn’t a way to skip this. In order to make better decisions with your money, you need to have a reliable baseline. “Doing the budget in your head” or “having a sense for how much you spend in a month” won’t cut it. Treat this as a one-time effort and power through it to get a documented starting point.