Of course, making a budget sounds like a great idea. In theory. But where do you start? Let’s go over a few budgeting tips to build your earning, spending, and saving foundation.

Start Where You Are

It may be tempting to wait for your ideal circumstances or a generous windfall from a reclusive great aunt, but those situations are rarely saved for reality. Remember to take your time so you don’t get overwhelmed and sink this budget planning ship. You can totally do this!

Tip 1: Track the Numbers

• These numbers include your after-tax income, expenses, and savings goals.
• For a “paper trail,” use a budgeting app, spreadsheet, or pencil and paper.
• Track everything for at least one month to see where your funds are going.

Tip 2: Determine Goals

• Make realistic, measurable goals such as: pay all utility bills every month, start a savings account, or cut back 50% on dining out.
• Create manageable steps like pay the rent and electric bill with the first paycheck of the month and the gas and water bills with the second paycheck, or split deposits between checking and savings accounts.
• Continue to record your financial activity and review it often.

Tip 3: Try the 50/30/20 Rule

• This popular budgeting model allows you to assign your after-tax income into three categories.
• 50% to needs (rent, utilities, essentials), 30% to wants (entertainment, travel), and 20% to debt repayments and savings.
• Most expenses will fall into one of these three categories, and you can easily reorganize them as your goals change.

Keep Your Money Close, and Your Budget Closer

A budget plan isn’t a one-and-done deal. As your economic situation changes, your budget will likely need to change, too. Revisit these tips whenever you need a refresh or if you want to dig deeper into your budgeting goals.