Budgeting allows you to identify wasteful expenditures, adapt quickly as your financial situation changes, and achieve your financial goals. Creating a budget will decrease your stress levels and help you prioritize your spending and manage your money—no matter how much or how little you have. Personal finance writer Laura Shin has a simple and flexible strategy of budgeting that uses the 50/20/30 guideline.
- “Tally your necessary expenses, aiming to keep them under 50% of your take-home pay.”
- “Aim to allocate 20% or more of your take-home pay to your financial priorities.”
- “From the remaining 30% or less of your budget, set yourself a weekly allowance.”