Do you know how to live on a budget?
Despite all of us not having been given the same base to start, at least we are given the same opportunity to create something for ourselves. This can be achieved by learning how to live on a budget. Building up this habit today will formulate a prosperous tomorrow.
To help you put this into prospective, we have created a chart for you:
There is one guide for that; the 50-30-20 rule which is simple, yet it requires effort to get used to.
Practically, 50% of your net income goes to living expenses, 30% goes to desires and 20% goes to savings and debt expenses.
There are plenty of methods to make this a daily habit, i.e. Spreadsheets and eventually, you will figure out what you can and what you cannot spend on a regular basis. It will allow you to search for areas where you can save money, such as purchasing items ahead of time during discount periods.
Track your progress.
Utilize your past bank statements to review how you have been spending and when you are able to deposit each month. It may be in your best interest to open a couple of different purpose accounts.
A great way to save is to open an online high internet account that withdraws from your monthly paycheck. Many of those offer .50% to 1% APY. Over time, it can have expotential benefits with minimal taxes over the course of the account’s existence.
Not only will this rule teach you how to save everyday, but also leave space for minimal changes in what you are used to up until now. What are you waiting for? Realize your goal without having to worry about every single penny.
And how do you save? What rule do you follow? Let us know by leaving your thoughts in the comment section below.