The 60/30/10 budget turns the traditional rules of budgeting upside down. Instead of focusing on discretionary spending, this budgeting rule emphasizes sprinting toward our financial goals. And although the 60/30/10 rule budget won’t work for everyone, many could use it to take their finances to the next level. Here’s what you need to know about the 60/30/10 rule budget.

What is a 60/30/10 budget?

The numbers in the 60/30/10 each represent a percentage of your financial plan.

• With this system, you will use 60% of your take-home pay to build your savings or even an early retirement account, invest, save up for a down payment, or repay debt.
• Next, you will spend 30% on your needs. These might include food or frugal meals, rent or mortgage payments, utilities, healthcare, and transportation like car payments.
• Finally, you use the remaining 10% of your budget to pay for discretionary spending. These wants might include new accessories, a spa day, or other ways to pamper yourself. You may also spend money on hobbies, entertainment, or other non-essential expenses.

Who is it ideal for?

After seeing the percentages, you might be curious to know who would thrive under the 60 30 10 rule budget. Ambitious savers are best suited for this budgeting style, especially if they have an ultimate lifetime money plan that includes a big money goal.

If I have big financial goals, then prioritizing saving might seem right.

For example, let’s say I want to pay off a large amount of debt fast. Putting 60% of my take-home pay towards that goal will help me achieve that goal faster.

Another example is anyone interested in achieving FIRE; Financial Independence Retire Early. It is no secret that those seeking FIRE must save a significant amount of money.

Pros and cons of a 60/30/10 budget

As with all financial choices, there are some advantages and disadvantages to sticking with the 60/30/10 idea. Here’s a closer look at the pros and cons you should consider before diving in.

Pros

Let’s start with the pros of the 60/30/10 rule budget. This idea has some significant upsides.

Faster progress toward financial goals

The most obvious advantage is that you’ll accelerate your timeline for any financial goals. Whether you want to build emergency fund savings or save money for a big-ticket item, saving 60% of your income in your savings accounts will help you accomplish that more quickly.

Disciplined spending on what excites you

You can still have fun with your spending. But you’ll need to be intentional and only spend on things that really matter to you. It helps to determine what your wants truly are when using the 60 30 10 rule budget.

For instance, if I really value traveling but instead usually spend my extra money on coffee and shopping, then I would need to change my spending. I would stop spending on those categories and focus on saving for my next vacation.

Motivation to boost your income in creative ways

If you want to boost your discretionary spending within the rule, you must increase your income. It could be the perfect way to stick to your side hustle.

The budgeting rule can help you accomplish your financial goals. Plus, it helps you uncover what type of discretionary spending is truly important to you.

Cons

Of course, there are also some downsides to consider. An extreme budget like this isn’t for everyone.

Limited discretionary spending options

Depending on your wants, it might be challenging to cut back on your discretionary spending. Some people prefer a more luxurious lifestyle and this budgeting method restricts those types of purchases.

For example, if you’re used to spending half of your income on discretionary expenses, it will be a major adjustment. But you can do it if you really want to prioritize your money savings goals!

Adjustments to your lifestyle

You may need to cut back on the needs in your life to keep it within the 30% rule. It might include cutting back on housing through house hacking or transportation and car expenses. Also, eating at home versus dining out and finding ways to drastically cut expenses.

It is clear that you might need to make some cuts to your spending within this budget. You’ll need to decide for yourself if the cutbacks are worth it.

The math may not work for your income right away

Unless you have a very large income, this budget could be challenging without some major lifestyle and financial changes.

For instance, even if you make $10,000 a month, your expenses would still need to be very low ($3,000) for this to work. So if you have this income and your expenses are $5,000, you would need to switch up some percentages or drastically change your lifestyle.

To make this work, you can either increase your income, decrease your expenses, or both.

How do you set up a 60 30 10 rule budget

If you want to move forward with a 60/30/10 rule budget, here’s how to set one up. Check out the following guidelines:

Step 1: Determine your take-home pay

The basis of the 60/30/10 budget is your take-home pay. It includes the money you earn after you account for taxes. 

If you are an employee, it may be as easy as looking at your paycheck to determine your salary. But if you are an independent contractor or business owner, it can be more difficult to nail down your take-home pay and monthly income.

The IRS offers a free tool to help you determine how much you should expect to withhold for taxes. But if you run into questions, it is a good idea to talk to a tax professional to help you determine exactly what your take-home pay is.

Step 2: Allocate to your financial goals first

Once you determine your take-home pay, it is time to allocate 60% of the funds to your financial goals. The best part is that your financial or savings goals will be entirely unique to your situation. You may decide to build an emergency fund, start investing, or pay off debt from credit cards or student loans.

Before you take any action, take some time to find and choose examples of financial goals that align with your future.

Perhaps you want to start investing. That’s a great step! But you should consider what your long-term goals are to ensure you make investments that will work for you.

As an example, one of my major savings goals is retirement. Let’s suppose I need to save $1,000,000 to reach my goal. Based on my current income and this budget, it might take about 20 years to reach this number.

But now I have a financial goal with a number, a time limit, and a long-term plan.

In addition, I should determine what investments will be best for my retirement goal in 20 to 30 years.

Step 3: Take care of your needs

Next, you will use 30% to cover your needs. Necessities encompass the essentials of life. Some examples include housing, utilities, food, groceries, transportation, and healthcare.

You may need to shop around to build a lifestyle that fits within 30% of your income.

For example, you might decide to drive an older car or choose to cook at home more to save money. In addition, you may get a roommate in order to reduce your house payment.

Step 4: Spend the last 10% on things you want

Last but not least, the remaining 10% of funds is to be spent on things that you want.

Whether you want to take a lavish vacation or upgrade your simple wardrobe to a more extravagant one, you’ll know what your spending limits are.

Don’t be tempted to skip spending on the things you want. It is important to treat yourself to the things that matter to you. Otherwise, it can be easier to let the entire budgeting plan fall apart.

Expert tip: Focus on having specific savings goals

Since you aren’t going to be spending as much money with this budget, it’s important that your savings goals feel very worthwhile to you. They need to be specific to your situation and also things that are very fun or interesting.

For instance, I really value being a home owner, so saving a down payment will be worthwhile.
Or perhaps you want to travel the world for a year and save a lot for retirement.

No matter what, make sure your goals are important to you. Also, be sure to use vision boards or create mini goals in order to stay focused.

What to avoid with this budget

There are several things you should avoid including being caught unaware by unexpected expenses. Since the percentage for necessities with this budget is low, there isn’t much room for error. Beware of increases in necessities like housing costs or groceries due to how inflation affects a household, etc.

Another thing to remember is not to confuse or mxi up your categories, like what is essential and what is extra non-essential spending. Remember your percentages and keep spending in check!

Last, don’t take on extra credit card debt, as it can be too much to handle. I find that not increasing my debt burden helps me to pay things off in a timely manner and can make this budget work long-term.

How does the 60/30/10 budget differ from the 50/30/20?

The difference between the 60/30/10 budget and the 50/30/20 budget are the percentages. The 50/30/20 budget was created by Elizabeth Warren and her daughter, Amelia Warren Tyagi. The idea is that 50% of your income pays for expenses and needs, 30% is for wants, and 20% is for savings.

The 50/30/20 budget is easier to achieve for many people because it is less extreme. With this approach, you save 20% of your income instead of 60%.

However, many people now believe saving more is better, especially with the rising cost of living. So it’s really up to you what percentage you feel is best to save or invest. You may lean more towards a higher saving percentage, or you might choose to spend more on living expenses, depending on your unique situation.

Is the 60/30/10 budget right for me?

The rule is an enticing choice for anyone who wants to improve their financial situation. Before you jump in, take a minute to be realistic about your current income. If you have a lower income, this plan might be too extreme at first.

Ultimately, this budgeting strategy is possible for everyone. However, you may need to consider increasing your income through a unique side hustle. Or making major cuts to your spending on big-ticket items like housing and food.

Of course, there are many other types of percentage budgets that you can try first if needed to get in the groove of saving.

For instance, the 70-20-10 budget, 30-30-30-10 rule, 50/30/20 budget, or the 80/20 rule are great budgets to start with.

If these don’t suit you, you could move back to the 60 30 10 rule budget! The main thing to remember is to pay yourself first so you are sure you save money before spending it.

What is a 60/30/10 rule example?

Let’s look at a couple of actual monthly budgets using this system. Suppose my monthly income is a net pay of $5,000. Next, I’ll divide it into categories. 60% of $5,000 is $3,000, 30% is $1,500, and 10% is $500.

In this scenario, I could save $3,000 for a down payment and an emergency fund. I would pay my bills with $1,500, including rent, groceries, and insurance. Then, $500 would be mine to use as I like.

For example, I might go to the movies or go on a weekend getaway.

You can see how this type of budget works better if you have a larger income.

For instance, let’s say the budgeter has a take-home pay of $12,000 per month. That gives much more money to pay bills and more to save. You would save $7,200 (60%), use $3,600 (30%) for necessities, and use $1,200 (10%) for fun.

Even with a high income, this rule is best used when you have big savings goals and your necessary expenses are quite low.

More articles related to budgeting

If you enjoyed learning about this budget and how to apply it to your finances, check out these other posts next!

• What Is The 70-20-10 Budget?
• 10% Rule: Is Saving 10% Enough?
• What Is The 60-20-20 Rule And How Does It Work?
• Save $5K With The 200 Envelope Challenge!

Save more money with the 60/30/10 budget!

The 60 30 10 budget could help to transform your finances. You’ll significantly accelerate your progress toward long-term financial goals. But you may need to spend some time boosting your income through multiple sources of income to make this budget a comfortable reality.

If you need some help creating a budget that works for you, then take advantage of our completely free budgeting course. You’ll find helpful guidance for setting up a budget that fits your goals and finances! For more fantastic financial tips, join the Clever Girls Know podcast and YouTube channel!

The post How Does The 60 30 10 Rule Work For Budgeting? appeared first on Clever Girl Finance.

When you are paid on a biweekly basis, it may make sense to create a biweekly budget. A biweekly budget is perfect for those who get paid every other week. You can structure your budget around your paychecks so you don’t miss anything with your money, and you can find out how here!

There are many monthly budgets to choose from, but it may get confusing if you get paid a few times in the month. Or perhaps you are simply looking to budget by each paycheck to have better control of your finances.

Personally, I’ve found using this budget game-changing. I have more control over my finances than ever before by budgeting this way. The process is not complex as long as you plan things out and set aside some time to prepare it.

If you are curious, I’ve got you covered with this guide on creating a biweekly budget. You’ll also find links to some excellent biweekly budget templates to help you start!

What is a biweekly budget?

A biweekly budget is a budget that considers a person getting paid every 14 days. So you will usually get a first paycheck and then a second paycheck in the same month (with some exceptions depending on the month e.g. some months will have three pay checks).

Some other pay schedules are getting paid monthly, weekly, and semi-monthly.

The difference between bi-weekly and semi-monthly pay schedules

The biweekly and semi-monthly pay schedules are slightly different as the total number of paychecks per year varies. The key difference is that you get 26 biweekly paychecks versus 24 semi-month paychecks.

That said, creating a bi-weekly plan gives you control over your finances because you can allocate specific expenses to specific paycheck each month.

How does a biweekly budget work?

With a biweekly budget, you will have ten months where you collect two checks and two months where you collect three checks. 

Even though your paychecks may be different in some months, many of your fixed expenses will stay the same. When you set up a biweekly budget, you’ll need to your expenses and income and lay it out for each month.

When I first started bi-weekly budgeting, I have to make sure I was properly distributing my income to specific expenses and goals each pay period. It was a little tricky at first to figure out how to do this but after a few weeks, I came up with an approach that works for me.

I essentially assigned bills that had due dates in the first two weeks of the month to one paycheck, and bills with due dates in the last two weeks of the month to the other paycheck. When it came to my savings goals, I decided on specific dates each month that I would like to “pay myself” and I split those payments according to when I would get paid.

Pros and cons

There are a few things to consider when setting up a biweekly budget. Some people find it makes life easier to budget on a weekly or monthly basis.

However, you can budget based on how you are getting paid. Here are some pros and cons of the biweekly budget.

Pros of a biweekly budget

1. Takes into account the timing of your paycheck and the pay period.
2. Using a bi-weekly expense planner allows you to plan and save up for the unique event.
3. The months with extra paychecks allow more room to pay off debt or save.
4. It is much easier to keep track of bill payments and times with the budget in place.

Cons of a biweekly budget

1. The initial input and setup take time. 
2. You may have to move around bill payment times to make it work.
3. There is a chance of not using the third paycheck appropriately.

How to create a biweekly budget

Now that we have the basics down let’s look at the steps in creating a biweekly budget. You want to ensure you can easily cover all of your essentials.

That means your rent (or mortgage), utilities, groceries, etc. Here are the steps to follow:

Step 1: Set up a calendar

To start creating your biweekly budget, you’ll need to set up a budget calendar with your bill due dates, pay dates, savings plans, and other important dates.

Having a calendar gives you a visual view of everything that will occur during the month, this way you can plan each bi-weekly check you get accordingly. That means that you can manage your first and second paychecks without worrying between them.

You can do this on a spreadsheet to have a visual view of everything that will occur during the month.

Step 2: Organize your expenses according to your bi-weekly pay

Once you have your calendar set up, ask yourself if you need to adjust the due dates on certain bills so they are more evenly spaced. Base this on when you get your bi-weekly pay so you don’t get behind on bills.

Look at when your mortgage, utility bills, and credit cards are due. Think about all the monthly expenses you pay out of your account.

The goal is to be able to cover the expenses that fall in each 14-day window with your bi-weekly paycheck. Split your expenses up into different categories to help you get this right.

Utility companies and other sources of your recurring bills can be quite accommodating when it comes to moving bill payment dates. Don’t be shy to call and ask for your due dates to be moved.

If you want to be sure you haven’t missed anything, it can be helpful to review your last few months of bank statements.

Step 3: Don’t forget your variable expenses

Once you have all your recurring expenses in place, go back through the month and examine any other potential variable or one-time expenses that could arise, such as entertainment costs.

For example, are there birthdays this month? Do you have to make an extra payment toward a larger debt? Are you planning a vacation or do you have a back to school shopping list?

Determine where to best fit them in your bi-weekly budget template. You should plan to review your variable and one-time expenses ahead of time every month.

If you want some extra help here, there are plenty of tools available. Some people find that using an expense tracker or debt tracker works for them, for example.

Step 4: Create a buffer

I personally think that this is the most important step for a biweekly budget. When all of the consistent and variable expenses are in place, go back through the budget and add a buffer.

The buffer should be for emergency money and big upcoming costs that would fall under sinking funds. Having this extra money is a huge help if/when an unexpected or big expense should come up. If you don’t use the buffer, keep it saved.

Step 5: Start tracking your budget

Now that your budget is in place, the last thing to do is start tracking. You must keep track of all spending and savings so that your personal budget is accurate. Keeping a spending journal can help!

There will be things that come up that are not part of your plan. These can be extra income or extra expenses, so make sure you track them all.

So, set a bi-weekly reminder to check in on your budget and make your bill payments and savings account transfers every two weeks. You might want to use a budget binder or download a PDF budget template to help you.

Biweekly budgeting tips

As you can see, the process of setting up a biweekly budget is not all that difficult. It takes an hour or so at the beginning of the month to plan out any expenses and income for that month. If you have mostly recurring expenses, it can take even less time.

Having this head start and being aware of the month ahead can help you ensure you are financially stable. Here are some great tips for biweekly budgeting.

1. Make sure you write everything down.
2. Use an app on your phone to track spending if necessary.
3. If your bill due dates are not working out, call companies and ask to change the due dates.
4. Save up for one month of expenses so that you will always know you have the month covered should something come up.

What to do when you have a third paycheck

Ready for some good news? Getting your third paycheck in a month will feel like a bonus if you follow your biweekly budget correctly. There are so many great ways to use that paycheck, but here are a few of the best options.

1. Pay down your debt.
2. Put some money away towards a big bill coming next month.
3. Plan ahead and grow your emergency fund.
4. Save for a vacation or a significant home expense that may be coming up.
5. Use it to put aside an entire month of expenses as a backup.

Best biweekly budget template options

Although you can always create your own biweekly budget templates, sometimes it is much easier to just print one. There are many different styles out there, so you can find one that matches your preferences.

1. Biweekly budget planner from The Savvy Mama
2. 101 Planners free budget template 
3. Templates free biweekly budget templates 
4. Vertex biweekly budget template

You can try each bi-weekly budget template. Or create a biweekly budget planner using a binder and make space for your bills, bank statements, and other financial documents.

Expert tip: Save a “fun” fund too

We’ve gone over how to cover your basic expenses but that said you make money so that you can enjoy your life. When you’re creating your budget, be sure to set aside some cash for the fun things in your life too. 

Alternatively, you might want to use your third paycheck for this from time to time. For example, I have found that this extra “bonus” is useful when covering trips away, parties, and special occasions. 

How much should I save bi-weekly?

If you can, it’s a great idea to set a goal of saving 10% to 20% from each paycheck when you are budgeting on a bi-weekly basis.

Of course, there will be times when saving that amount is out of reach. If that is the case, keep it as a goal for the future and instead you can aim to save at least 5% of your income each paycheck.

Is a bi-weekly budget different from a semi-monthly budget?

Yes, a bi-weekly budget and a semi-monthly budget are different. With a bi-weekly budget, you are planning your finances based on getting paid every 2 weeks (14 days). In a 12 month period would get paid 26 times.

Whereas with a semi-monthly budget, your plans will be based on getting paid twice a month. And in a twelve month period, you’ll get paid 24 times.

With a bi-weekly budget you will get an extra paycheck twice a year. So it’s important to look at the calendar and determine which months you’ll get paid three times so you can properly plan for this money! I like to use this pay to accelerate my savings goals or plan for big events like family trips.

Articles related to budgeting and saving

If you found this article helpful for managing your budget, check out these other ideas!

• Make A Weekly Savings Plan (Or Bi-Weekly Savings Plan) That Works!
• Are Biweekly Mortgage Payments A Good Idea?
• How To Do A 6 Month Savings Challenge!
• The 50-30-20 Rule: How It Works + A 50 30 20 Budget Template

Try the biweekly budget to manage your finances!

Now that you have everything you need to develop a biweekly budget, set aside time on your calendar to get started. We know the process of putting this all into place can be a bit daunting, but it is indeed the right path to becoming fiscally responsible and successful.

It’s hard to see exactly where your paycheck is going until you put it down on paper. Putting together a budget is eye-opening and will change how you think about day-to-day spending.

If you are paid biweekly, then a biweekly budget planner can be the best method for your finances. The more specific these plans can be, the better your chance for success.

The key is to manage your money wisely so you don’t have to live paycheck to paycheck. Learn more about ditching debt, saving money, and building wealth with our blog and completely free financial courses!

The post How To Create A Biweekly Budget In 5 Simple Steps appeared first on Clever Girl Finance.

How can you ensure you don’t go over your budget? Staying focused with money can be challenging for many of us (raising my hand here!). The temptation to overspend, unexpected expenses, and lifestyle inflation are just a few obstacles that can get in the way. However, with the right strategies, learning how to stay on budget can be done!

In this article, I’ll go over key tips and techniques to show you how to stay organized and not overspend with money. Let’s dive in!

Fundamentals for budgeting success

Before we can figure out how to stay on budget, it’s helpful to understand some basics. At its core, budgeting involves three fundamental steps: defining our financial goals, tracking our expenses, and creating a system that aligns with our objectives. Here’s a little more about each of these:

Define your financial goals

As we begin our journey, defining and clarifying financial goals is essential.

Whether buying a house for the first time, eliminating debt, or building an emergency fund, establishing clear and measurable goals is key. Once we have those goals in place, we can better determine what kind of system to create.

Track your expenses

With our goals in mind, it’s time to gain a thorough understanding of current spending habits. As they say, we can’t move forward if we don’t know where we are right now.

Keep meticulous records of expenses for a few weeks, categorizing each and identifying patterns.

For instance, where do you like to spend? Struggle with overspending? By doing this, you can start to pick out areas where adjustments can be made.

Whether through the use of apps, spreadsheets, or an old-school notebook and pen, tracking your expenses is one of the first steps toward exercising control over finances.

Create a realistic budget

With an understanding of our financial goals and insights into our spending habits, we’re ready to create a system. While there are many ways to create and make a better budget, one key is to make sure ours is realistic.

I like to account for all sources of income and expenses, including fixed costs and discretionary spending, like clothes and gifts. Be authentic when setting your budget. You don’t want to set yourself up for disappointment.

Focus on creating a balanced system that reflects your current financial reality, leaving plenty of room for adjustments.

6 Tips for staying on budget

With an understanding of what a budget is and a solid financial system firmly in place, here are six tips to help you stay on budget:

1. Set spending limits

It’s important that you establish clear spending limits within each category. This is key to preventing overspending. Allocate specific amounts for essentials such as groceries, transportation, housing expenses, and fun money/discretionary categories like dining out and entertainment.

It’s okay to spend on certain “frivolous” things. Nobody is stopping you from occasionally indulging in what you love. But we should set limits for ourselves.

For example, if you love shopping at Sephora (who doesn’t?), include that, but set yourself a cap and vow to stop spending once you hit that limit. That way, you can still indulge here and there but won’t blow your money goals because of it.

2. Automate your bill payments

Automating our finances is one of the most effective strategies for staying organized.

By setting up automatic transfers or payments for recurring expenses such as rent and utilities, we can be sure we’ll meet our financial obligations on time.

Not only does this minimize the risk of late fees or missed payments, but it can also help ensure those bills are always paid first before we begin to spend on discretionary things.

3. Practice the 24-hour rule

Impulse purchases are the downfall of many money-conscious people, derailing even the most meticulously crafted plans.

To combat impulse spending, adopt the 24-hour rule: before making non-essential purchases, wait twenty-four hours and reassess whether the purchase aligns with your financial goals. This cooling-off period provides an opportunity for reflection and helps prevent impulsive decisions.

I’ve successfully used this rule to help me curb my impulse spending. I’m aware that social media ads can easily lure me into buying something I didn’t even know existed before logging on that day, so I’ve implemented the 24-hour rule for online shopping.

If I see something I like, instead of adding it to my cart and instantly buying it, I make myself wait a day. Usually, I don’t even remember I saved something in my cart until days or weeks later, and by that time, I’m no longer interested. But, if I still am, and if it’s in my budget, I can still buy it!

4. Plan for unexpected expenses

Are you wondering how to stay on budget when something unexpected happens? Life is unpredictable, and unexpected expenses are inevitable.

To mitigate the impact of these surprise costs, establish an emergency fund with three to six months of living expenses. You can weather financial storms by setting aside funds for emergencies, such as hospital bills, car repairs, or home maintenance.

5. Practice self-compassion

Like most areas of personal finance, cultivating a sense of self-compassion is essential. Everyone will veer off course and throw their budget out the window at some point.

Instead of beating ourselves up over a slip-up, reacting with kindness is important. Remember—it’s about progress, not perfection when it comes to sticking to a money system.

6. Regularly review and adjust your budget

How can you ensure you don’t go over your budget? One of the best ways is to do a budget review periodically.

As our circumstances change and our financial priorities shift, we need to remember to adjust our financial system accordingly. Whether due to changes in income, expenses, or personal goals, we will all see lots of changes in our financial lives.

We should set aside time each month to assess our money, identify areas for improvement, and make the necessary changes.

Expert tip: Try loud budgeting

In recent years, there’s been a big shift in how we talk about money. And this is a good thing!

No longer is money the taboo topic it used to be. For example, it’s become more commonplace to share salaries with our coworkers or tell our friends how much our end-of-year bonus was. That’s why “loud budgeting” is having a moment right now.

To make loud budgeting work for you, start by being more open about what you want to and can spend your money on. We can thank Gen Z for promoting this idea, but it can help all of us stick to our budgets!

How can you ensure you don’t go over your budget?

In addition to the strategies outlined above, here are some more tips to help safeguard us from overspending:

Use apps

Digital tools are one of the best ways to streamline our finances and stick to our goals. From expense tracking to goal setting, apps offer many features designed to keep us on target.

Some of our favorites include You Need a Budget (YNAB) and Microsoft Excel’s budget templates, in addition to our own best budget templates, of course!

Know your spending triggers and keep away

Identify the triggers, such as emotional spending, that lead to impulsive shopping.

For me, it could be stress, boredom, or anxiety. We can develop strategies to prevent overspending when we become aware of our triggers and temptations.

For example, if I know I always shop online when bored, I can replace this behavior with calling a friend.

One of my big spending triggers is procrastination. More specifically, I procrastinate when I’m anxious about a task that I don’t know how to start. When this happens, I will do anything to avoid that task!

Often, that “anything” includes shopping. I’ll convince myself I have to shop to avoid the discomfort of not knowing how to do something. Luckily, I can usually identify when I am doing this, have a little chat with myself, be kind to myself, and force myself just to start.

Find an accountability partner

Want to know how to stay on budget? Ask a good friend or family member to serve as an accountability partner on your money journey. Share your financial goals, challenges, and progress with this person.

In addition, you can use their support and encouragement to stay motivated, and they can get the same benefits from you.

What is the best way to stay on a budget?

Staying on budget requires planning, discipline, flexibility, and self-awareness. Here are some additional tips to help us stay consistent with our finances and achieve long-term financial success:

Find a method that works for you

Explore different methods, such as zero based budgeting, the cash envelope system, or the 50-30-20 rule, to find an approach that resonates with you and your financial goals. Experiment with various techniques until you discover the best method for your needs.

Be disciplined yet flexible when learning how to stay on budget

While sticking to our goals is essential, staying flexible is just as crucial for long-term success. Life is full of surprises, and maintaining flexibility in our budgets allows us to navigate unexpected expenses or income fluctuations, such as irregular income, without sacrificing our financial stability.

Celebrate small wins along the way

How can you ensure you don’t go over your budget? Acknowledge and celebrate your achievements, no matter how small, as you progress.

Whether it’s paying off one credit card or sticking to your financial system for one week or an entire month, each accomplishment brings you one step closer to your goals. Celebrating your successes reinforces positive financial habits and motivates you to continue your journey.

Why can’t I stay on a budget?

Despite our best intentions and efforts, we may fail to stick to our budgets.

In fact, we probably will, and that’s okay! The important thing is that we adjust and get back to it. Here are some common reasons why people might struggle with how to stay on budget:

Failure to adjust for income or lifestyle changes

We’re likely to face changes in income or expenses, which can significantly impact our money. If we don’t adapt our finances to accommodate these changes, it can cause a lot of frustration, not to mention financial strain.

We need to be proactive by reassessing our finances regularly and making adjustments as necessary to reflect our current circumstances.

For example, a few years ago, I left a job with a high salary. It was the best thing I could have done for my mental health, but it wasn’t the best financial move because I did not account for my adjusted (lower) income.

I kept my lifestyle and spending habits for a few months, not adjusting my finances to my new reality. Luckily, I did correct course quickly to live below my means, but it’s something to be aware of because our financial circumstances are often changing. It’s important to make sure our spending and budget change, too.

Unexpected expenses

Emergencies and unforeseen expenses will occur. For all of us.

Failing to plan for these costs can disrupt even the most carefully crafted budgets. To minimize the impact of these unexpected expenses, prioritize building an emergency fund and maintain a financial buffer.

Emotional spending

Emotions play a powerful role in our financial decision-making processes. No matter the root cause, emotional spending can sabotage our efforts and derail our financial goals.

If we can learn to recognize the underlying triggers behind our spending habits and develop healthier coping mechanisms to address them effectively, we’ll be well on our way to sticking to our budgets.

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• How To Budget By Paycheck: 5 Key Tips For Success
• Budget Not Working? Here Are 5 Tips For Better Budgeting!
• 15 Key Tips For Living On One Income
• Save More! Try A No Spend Challenge!

Embrace these principles to help you stay on budget!

By embracing the principles discussed here, we’ll all be one step closer to staying on target with our finances.

Remember your finances won’t always be perfect, and you might slip up here and there, but you can always regroup and get back to successfully budgeting. Focusing on your goals and keeping organized finances will help you make progress!

The post 6 Practical Tips For How To Stay On Budget appeared first on Clever Girl Finance.

Budgeting can be a tough habit to maintain especially if you have a lot of numbers, but it’s oh-so-important for women who want to take control of their finances.  Because budgeting can feel like a drag sometimes, everyone could use a little extra motivation to keep their spirits elevated when it comes to budgeting. That said, today’s motivation comes in the form of 42 budget quotes (in total) that will improve your mindset!

Why budget quotes are inspiring!

Want to know why quotes about budgeting help? Quotes are short and sweet bits of wisdom or humor (Check out our funny money quotes!) based on something someone has said, which in turn inspires us to keep moving forward when the going gets tough.

Budgeting quotes are usually quite brief, so they can help us focus and give us just the push we need to continue on with our day even if the tasks we’re doing don’t feel like they matter much in the moment.

Below are 42 budget quotes broken out by category to inspire you, motivate you, help you stay on track, and give you ideas to take your budget mindset to the next level.

8 Quotes on budgeting for overall inspiration

We all know the purpose of a budget but sometimes, just a little bit of inspiration can be just what we need to stay focused. 

Use these inspirational budget quotes to reignite your passion for budgeting and find the inspiration you need to keep going!

1. “If we command our wealth, we shall be rich and free. If our wealth commands us, we are poor indeed.” – Edmund Burke

2. “Budgeting is not just for people who do not have enough money. It is for everyone who wants to ensure that their money is enough.” – Rosette Mugidde Wamambe

3. “Every cent you own and every moment you spend is always an investment.” – Natalie Pace

4. “If broke people are making fun of your financial plan, you are on the right track.” – Unknown

5. “Life is a dance between making it happen and letting it happen.” – Arianna Huffington

6. “One reason people resist change is because they focus on what they have to give up, instead of what they have to gain.” – Rick Godwin

7. “A budget doesn’t limit your freedom; it gives you freedom.” – Rachel Cruze

8. “Our goals can only be reached through a vehicle of a plan, in which we must fervently believe, and upon which we must vigorously act. There is no other route to success.” – Picasso

Remember why you are budgeting in the first place

What I love about these inspirational quotes is that they remind us why we budget, which is helpful when we’re mired deep in the how of budgeting. 

When you forget to “find your why” budgeting can sometimes feel like you’re just slogging through the numbers, making a ton of sacrifice and making yourself feel guilty about what you’ve spent our money on.

But in reality, the whole point of budgeting is to find financial freedom. As Rachel Cruze said, a budget gives you freedom. So, these quotes can help you keep that freedom top of mind.

I encourage you to pick one or two of these quotes that resonate with you and write them on a post-it note. (Or if you’re feeling fancy, type them up in a pleasing font and print them out.) 

Post them somewhere you’ll see them often. They’ll inspire you to whip out your budgeting app or spreadsheet even when you don’t feel like it. Additionally, it’s worth thinking about what your favorite quotes about budgeting are and using them in your everyday life.

8 Motivating quotes even when budgeting is hard

Sometimes budgeting can be downright hard. It could be that your budget isn’t going accordingly to plan or you are just too tired or stressed to track it. 

However, there are some handy, motivational quotes about budgeting you can use. These quotes will give you the motivation you need to keep budgeting!

1. “Becoming rich is hard. Staying broke is hard. Choose your hard.” – Eric Worre

2. “You don’t have to see the whole staircase, just take the first step.” – Martin Luther King, Jr.

3. “The slightest adjustments to your daily routines can dramatically alter the outcomes in your life.” – Darren Hardy

4. “It is not necessary to do extraordinary things to get extraordinary results.” – Warren Buffett

5. “Money, like motions, is something you must control to keep your life on the right track.” – Natasha Munson

6. “A budget isn’t about restricting what you can spend. It gives you permission to spend without guilt or regret.” – Unknown

7. “If you don’t get serious about your money, you will never have serious money.” – Grant Cardone

8. “People do not decide their futures. They decide their habits, and their habits decide their futures.” – FM Alexander

Small actions add up to big progress over time

One reason that I find budgeting so draining is that it takes small, consistent, and often monotonous actions to see tangible, exciting results. And as a result, those actions can feel meaningless when we lose sight of why we’re doing them.

For instance, on a day-to-day basis, it can be easy to think to yourself, “I won’t ruin my budget if I don’t budget today.” However, say that too many times and soon you won’t have a budget at all.

Use these quotes to motivate yourself to keep doing the small actions every day (or at least once a week!). Actions like importing your transactions, categorizing your expenses, and reviewing your monthly budget progress do matter.

There are ways to make budgeting easier. Find budget templates or tools that work for you and make budgeting less painful.

12 Budget quotes to help you save more money

Saving money can be painful and demotivating, especially when you’re first starting out. Additionally, even a small leak can have big consequences.

However, with the best quotes about budgeting by your side, you can upgrade your saving habits and find motivation for saving money. So here are some quotes to help you stay focused as you work on saving more money:

1. “Money is only a tool. It will take you wherever you wish, but it will not replace you as the driver.” – Ayn Rand

2. “Too many people spend money they haven’t earned, to buy things they don’t want, to impress people they don’t like.” – Will Rogers

3. “You must gain control over your money or the lack of it will forever control you.” – Unknown

4. “When money realizes that it is in good hands, it wants to stay and multiply in those hands.” – Idowu Koyenikan

5. “Beware of little expenses; a little leak will sink a great ship.” – Benjamin Franklin

6. “Don’t give up what you want most for what you want now.” – Unknown

7. “Unless you control your money, making more won’t help. You’ll just have bigger payments.” – Dave Ramsey

8. “Money isn’t about buying bigger and better things. It’s about being prepared to take care of your family.” – Unknown

9. “Save money, and money will save you!” – John Soforic

10. “Don’t save what is left after spending; spend what is left after saving.” – Warren Buffett

11. “The rich get rich because they pay themselves first.” – David Bach

12. “We must consult our means rather than our wishes.”― George Washington

Learn how to spend money so you can save more money

I subscribe to the philosophy that if you’re cutting back on expenses to the point of depriving yourself of everything you love, you’re not likely to stick with your budget. 

That said, I didn’t include any budget quotes that shame you for spending money on things you love. Budgeting shouldn’t be about only spending money on the bare necessities, because you need fun money, too.

Instead, opt for creative savings where you can. Don’t spend your money on expenses that don’t truly bring you joy or value. And if you do have to cut back on some things to save money, use these budget quotes about saving to remind yourself why you’re doing so.

5 Budgeting quotes that will inspire you to earn more

Sometimes our budgets reveal that if we want to truly make progress toward our financial goals, we need to start earning more money. 

And when we do start earning more money, our budget helps keep us accountable to actually save that money instead of increasing expenses. 

In addition, there are a bunch of budgeting quotes that can help here. So let’s take a look at are our favorite quotes about this:

1. “Become so financially secure that you forget it’s payday.” – Unknown

2. “The more your money works for you, the less you have to work for money.” – Idowu Koyenikan

3. “The stock market is designed to transfer money from the active to the patient.” – Warren Buffett

4. “Compound interest is the eighth wonder of the world. He who understands it, earns it, he who doesn’t, pays it.” – Albert Einstein

5. “Don’t make money, create wealth. Making money is easy. Being able to create and sustain wealth is what will set you apart from the rest.” – John Rampton

You have what it takes to earn more money

Many of these budget quotes reveal that one of the easiest ways to earn more money is to put your money to work for you and invest.

However, are you afraid you don’t have enough knowledge about investing? Investing for beginners isn’t as difficult as you’d think.

You don’t have to be an expert on investing to get started, and there are plenty of resources to help you learn more. (Order the Clever Girl Finance book Learn How Investing Works, Grow Your Money today!)

You can also learn how to invest with a small amount of money. Investing just a little bit today can earn you more than investing a lot of money in a few years, thanks to the power of compound interest.

9 Best quotes on budgeting overall

This last section includes some of the best quotes of all time on budgeting. Many of these budget quotes were spoken by people who have seen firsthand how the power of budgeting helps you grow wealth and become financially secure. 

1. “The simplest definition of a budget is ‘telling your money where to go.” – Tsh Oxenreider

2. “Don’t tell me what you value, show me your budget, and I’ll tell you what you value.” – Joe Biden

3. “A budget is telling your money where to go instead of wondering where it went.” – Dave Ramsey

4. “A budget is more than just a series of numbers on a page; it is an embodiment of our values.” – Barack Obama

5. “The budget is not just a collection of numbers, but an expression of our values and aspirations.” – Jacob Lew

6. “Money is a terrible master but an excellent servant.” – P.T. Barnum

7. “Got my mind on my money, and my money on my mind.” – Snoop Dogg

8. “Stop being the chess piece, and start being the chess player. It’s time to master the game of money once and for all.” – Tony Robbins

9. “Budgeting isn’t about limiting yourself – it’s about making the things that excite you possible.” – Unknown

Chances are, one or two of these will resonate with you and remind you why you’ve committed to budgeting in the first place.

The speed of your success depends entirely on your own dedication to budgeting. You can change your spending habits and the way that you manage money by identifying your true needs. Also use these quotes to align your purpose for budgeting with your personal core values. 

Expert tip: Create a budgeting vision board

Nobody can do the work for you. When it comes to the understanding of your budget, you are the master of your own destiny.

But sometimes, we all need a little motivation to get things moving. With a little creativity, you can make your own budgeting vision board.

For example, include images that make you feel motivated, a handful of the best budgeting quotes, and anything else that inspires you. 

Saving money is the result of habit. The secret to getting it right is reminding yourself why you are doing it. Whenever you feel like going off track, take a look at your board for support. 

What is a positive quote about budgeting?

One of my personal favorite positive quotes about budgeting is “A budget is telling your money where to go instead of wondering where it went” by Dave Ramsey. For me, it sums up why we put sustainability and budgeting first. Essentially, we need ot have a plan for our money, otherwise it will slip away.

What is a famous quote on budget?

Chances are, you know the lyric “Got my mind on my money, and my money on my mind” from Snoop Dogg. It may not be the most literary budgeting quote but it will stick in your head!

What is a catchphrase for budgeting? 

If you’re looking for a short and sweet catchphrase about budgeting, here’s one of the best. “Save money, and money will save you!” by John Soforic. Why not write it somewhere you will see it every single day?

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Get inspired by these quotes to stay on track with your budget!

Budgeting can set you free financially. Furthermore, done consistently over time, budgeting allows you to practice intentional living with your spending. And cutting the budget without sacrificing the things you love most is rewarding.

So if you’re struggling to stay on track with your budget, pick one, two, or even three of these quotes that stand out to you and post them in a place you’ll see them often. Stay focused, stay motivated, and just keep budgeting.

In addition, if you want to become a budget boss, make sure to enroll in our free Create a Budget That Works course. Also, check out our other 100% free courses, worksheets, and resources to help you build and maintain a solid financial foundation for the rest of your life!

The post 42 Budget Quotes To Improve Your Budget appeared first on Clever Girl Finance.

There are many different ways to come up with your perfect budgeting strategy. Alongside your monthly budget, you should also have a bare bones budget waiting in the wings. Even if you don’t need to cut back completely right now, it’s a good idea to know how to create a minimal-expense budget and have it ready so you are prepared in case of a financial emergency.

What is a bare bones budget?

It’s a budget that only covers the necessities. Meaning you will only spend enough money to survive with the basic essentials and fulfill your minimum financial obligations.

With a bare bones budget, you do not leave any room for extra spending.

Sound restrictive? It definitely is. That’s why this is not a plan for better budgeting in the long-term.

In normal conditions, you should also leave space for you to buy things you don’t necessarily need but that you want—like vacations, nights out, and lattes. (That’s right—treating yourself to lattes will not lead to financial ruin.)

On the other hand, this budget is a short-term solution to help you get through a period of financial distress.

Who needs a bare bones budget?

Covering only the bare expenses will help you to significantly decrease your outgoings. While it may seem dire, there are a lot of different reasons why you may need to cut back. 

When you experience income loss

Most often, people turn to a restrictive budget when they need to curb spending because they are experiencing some loss of income. During these periods, you may only have the cash to pay for the essentials. For example, when:

• You lose your job.
• You have a pay cut.
• There is a loss of income in your household.

This is why it’s so essential to have an emergency fund. While cutting back is likely necessary when you lose income, having an emergency fund as a cushion will really help take the pressure off when you’re in a money-tight situation.

When you want to save a lot of money fast

That said, there are also times when you may want to switch to a bare bones budget even when you haven’t lost any income. For example, when:

• You want to get out of debt.
• You want to achieve a specific financial goal quickly.

Swapping your regular budget for a minimal one for a few months can definitely help you slash expenses so you can save up a big chunk of money fast.

When you want to be prepared

Even if you’re not ready to cut back completely, it’s still a good idea to create a bare bones budget.

If you create one before you need it (hopefully, you won’t ever need it!), then you’ll be ready to cut your spending right away in the event of a financial emergency.

How to create a bare bones budget

There are only 3 steps needed to get started. Check out this simple list to help you create a budget without excess.

1. Make a list of your necessities

First, start by printing out all your bank statements and credit card statements from the last month. Doing so gives you a look at your current spending—which may be a lot different than you think.

According to Nerd Wallet, 83% of Americans think they overspend. Be diligent! Look carefully and use a highlighter to identify only the essential expenses.

2. Make a list of what you need to cut

Next, see everything else in your statements that isn’t highlighted? That’s what you need to cut back. Yup, it’s about only covering the basics—nothing more.

In addition, take note of any non-essential expenses that are automatically deducted from your account or charged to your credit card—and cancel them.

3. Use a budgeting tool to stay on track

Finally, use a budgeting tool to document your new budget. Having everything organized and written down will help you stay accountable and stick to your budget. You can use a budget planning notebook or an app if you prefer.

Also, it’s a great idea to give yourself a timeframe for how long you expect to use this type of budget. Remember, a bare bones budget is simply a temporary measure; once you’re out of your money-tight situation, you’ll have to reevaluate your spending.

Key considerations

Everyone’s budget will look different because cutting down on spending looks a little different for everyone.

Of course, there are some general rules of thumb to follow. The following payments are usually necessary costs. They are non-negotiable.

Housing

• Mortgage/rent
• Property taxes
• Homeowners association fees

Utilities

• Heat
• Electric bill
• Water
• Air conditioning

To shrink your monthly bills, try to reduce your use of utilities as much as possible.

Food

Particularly, this is a hard one to whittle down. But when you’re lowering expenses, you need to remind yourself to only spend money on essential groceries.

Believe it or not, according to Recycle Track Systems, the U.S. throws away almost 60 million tons of food a year. That’s a lot of waste—and a lot of lost money!

Fortunately, learning about budget meal planning can go a long way in helping you stick to a tight food budget so you can avoid waste. On top of that, remember to check out what coupons are available at your local grocery store to save more money.

Transportation

• Car payment
• Gas
• Parking
• Public transportation

Debt repayments

Don’t forget to include your debt reduction strategy and repayments in your bare bones budget!

While it may seem like this is something you can skip, doing so will just make your pile of debt grow with increasing interest. Plus, continuing to make debt payments will help you maintain a good credit score even during a money-tight situation.

When you’re trying to lower expenses, just focus on the minimum monthly payments. But if you’re adopting a bare bones budget to save money to pay off your credit card debt faster, then you can reallocate the money you save from other expenses to make bigger debt payments.

Phone

• Reduce your phone plan to the cheapest plan possible

Internet

• Same thing here—reduce your internet plan to the cheapest plan possible

Healthcare

• Medications
• Co-pays for appointments
• Over-the-counter treatments

Insurance

• Health
• Auto
• Life/disability
• Renter’s

Certainly, insurance is something you want to keep—even when you have to switch to a bare bones budget. To help you start cutting back, try calling your insurance providers to see if they have any discounts you can use.

Retirement contributions

Your long-term retirement savings might be impacted by your budget, especially when you are trying to lessen your expenses.

If you still have a job

If you are employed, keep on making contributions to your retirement account. You may prefer to hold off on extra contributions to your retirement account for now, depending on your situation.

But if your employer offers matching in a 401k, for example, then keep contributing at least as much as your employer will match.

If you lost your job

If you don’t have a job and you’ve been contributing to your own traditional or Roth IRA outside of your employer, then you may decide to stop making contributions to your retirement account for now.

That’s okay for a few months—above all, you want to avoid dipping into your retirement savings to cover expenses.

Family expenses

• Daycare
• School tuition
• Alimony
• Child support

Personal care

• Toiletries
• Work clothes
• Haircuts as needed for work

Pet care

• Pet food
• Medications
• Vet bills

Expert tip: Consider minimalism to cut down on your budget

Minimalist spending means cutting back on all the expenses you don’t need to cover. Yet, so few of us actually practice this.

When you are sticking to a strict budget, embrace the opportunity to appreciate the value of things rather than merely the cost. Focus your attention on doing things that add true value to your life rather than being expensive.

That may be reading a good book, spending quality time with a loved one, pursuing your creative passions, or even working on your business. 

Bare bones budget example

Here’s an example of a budget that has only the essentials based on a monthly income example of $3,500. It goes along with the categories discussed above.

The example totals $3,500. You can adjust the expense numbers to fit your personal situation. If you find that you have extra money left, don’t spend it. Save instead, pay off debt, or contribute to retirement, depending on your circumstances.

What you shouldn’t spend on

Now you know what’s essential, but here’s what to avoid adding to your expenses.

• TV
• Streaming subscriptions or cable alternatives
• Music subscriptions
• Any other unnecessary memberships or subscriptions (e.g., magazines, newspapers, gym, etc.)
• New clothing
• Non-essential travel
• Non-essential personal care products (e.g., cosmetics, manicures, etc.)
• Restaurants and bars

Sticking to your budget and splurging

If you’re truly in crisis mode and can only cover the bare expenses, then you’ll need to halt all unnecessary spending.

However, if you’re using a bare bones budget to get out of debt or save for a big financial goal (e.g., a down payment on a house or a wedding), then making room for a monthly splurge can actually be a good idea.

Leaving room for treating yourself to one monthly splurge (like a dinner out or a manicure) can give you a tiny bit of relief from the strict rules you’re following.

How do you successfully stick to a bare bones budget?

To stick to a bare bones budget, first work out what your necessary costs are and ensure you can cover them. All other spending (such as luxuries, entertainment, and non-essentials) will need to go on hold.

Sticking to a bare bones budget can be tough but it is very possible to do with intention and focus. If you are struggling to stop spending, here are some tips that you can try for yourself: 

Keep track of your spending

Do you know where your money is going? If the answer is no, you need to start tracking your spending.

A great way to do this is by leveraging a spending journal where you write down what you spend and then review it at the end of each day. There are also plenty of budget templates and tools you can use to do this.

Remove any obvious temptations

Whether it’s your friends asking you to go on a night out or “window shopping” at the mall, you may be tempted to overspend. Removing these temptations will help you stay on track.

Use cash, not your credit cards

If you usually spend money using credit or debit cards, now is the time to stop. By using cash, you can see exactly where your money is going in real time.

What do bare expenses mean?

Your bare expenses are the payments that you need to make in order to live. They include essentials, such as your housing costs (rent or mortgage), food, medicines and your core utilities like water, electricity and internet.

When you are trying to cut back on spending, these are the costs that are unavoidable, so you need to continue to pay them. 

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If you liked learning about how to budget without excess, check out these posts about budgeting next!

• 12 Tips For How To Drastically Cut Expenses To The Bone
• How To Budget: The 4 Best Budgeting Methods To Try!
• 10 Of The Best Budget Templates And Tools
• 7 Budgeting Best Practices

Prepare now—don’t wait for an emergency to create a bare bones budget

Even if you don’t need a bare bones budget right now, having one outlined and at the ready is always a good idea. That way, if you’re ever in a money-tight situation, you can relieve a bit of the stress by being prepared to cut expenses fast.

Above all, having a good budget (and sticking to it!) is the key to financial wellness—no matter your current financial situation. You can also discover other creative ways to cut back on your budget!

The post How To Create A Bare Bones Budget appeared first on Clever Girl Finance.

A quick Google search of budgeting methods will show you that there’s no shortage of options out there. There is, however, one particular budgeting method that could work well if you are just getting started with budgeting and more so if you don’t like the idea of a monthly budget. The method we’ll talk about involves creating a paycheck budget.

Budgeting by paycheck can help take some of the overwhelm out of the conventional monthly budget. You’ll get a super clear understanding of the money coming and going from your bank account. You’ll also find out how to avoid overdraft fees once and for all due to more frequent planning.

What is a paycheck budget?

The paycheck budget is a strategy where, rather than budgeting just once a month, you budget each time you get paid.

Because most workers get paid either weekly or biweekly, according to Patriot Software, courtesy of the U.S. Bureau of Labor Statistics, this budgeting approach can be a good way to stay involved with your finances. Especially since it requires you to think about your finances every time you stop by the check cashing place.

When you use the paycheck budget method, you assign each of your expenses to a specific paycheck.

For example, let’s say you get paid on the 1st and the 15th of each month.

If rent is due on the 1st, you can plan to use the paycheck from that pay period. If your cell phone bill is due on the 20th, you can then pay that bill with your second paycheck of the month. You can also leverage your budget to determine how much to save from each paycheck.

Benefits of a paycheck budget

Using a paycheck budget is a great way to get started with money management and begin embracing healthy financial habits.

You know where your money is going

First, paycheck budgeting gives you a clear understanding of where each dollar is going. You probably know roughly how much money you earn and how much you spend each month.

However, budgeting by paycheck really shows you where the money from each paycheck goes.

Overdraft and late fees can be avoided easily

Next, it helps avoid overdraft and late fees. It can also keep you from running out of money before you get paid again. If you know exactly which expenses will come out of each paycheck, you can make sure you aren’t spending more than is actually available to you before your next paycheck.

Many people put expenses on a credit card and then pay it off each month. Which can become problematic when you’re spending money you haven’t actually earned yet. It gets even worse when you spend more on your credit cards than you’ll earn to pay off.

From Generation X to Gen Zers, over half or nearly half have credit card debt with each generation, according to Bankrate. But when you budget by paycheck, you can better avoid the trap of credit card debt.

You can keep track of your money easily

Finally, this budgeting method forces you to check in with your finances on a regular basis. And when you check your budget regularly, it becomes easier to manage.

Keeping track of your money is key for staying on top of your spending and keeping pace with your financial goals.

As you can see, there are several advantages of budgeting by paycheck.

Who is this method right for?

Personal finance is just that: personal. As a result, there’s no single budgeting method that will work for everyone. The best strategy for any one person is the one that they’ll stick to.

That said, the paycheck budget method is ideal for people in a few specific financial situations.

People who are paid more than once per month

Budgeting is a little easier when you’re getting paid monthly. Monthly is simpler because you always know where the money for your bills will be coming from. But for those who are paid more often, there’s a little more legwork that goes into it.

You have to time your expenses just right to make sure you aren’t spending money that hasn’t hit your bank account yet. With the budget-by-paycheck method, you can divvy up all of your expenses to correspond with a specific paycheck.

People who live paycheck to paycheck

If you are living paycheck to paycheck, which is over half of Americans, according to CNBC, the last few days before payday can be painful. You may be scraping by on your last few dollars.

Budgeting by paycheck can help you make a plan for your income to ensure you don’t run out before payday. It might also be what finally helps you to break the paycheck-to-paycheck cycle.

People who are new to budgeting

Traditional budgeting advice would have you plan out your expenses one month at a time. But this doesn’t take into account the fact that many people aren’t paid on the first of the month.

So, if you’re new to budgeting, following this traditional advice may result in spending money you don’t have yet.

A paycheck budget can help you get into the habit of noticing when money comes in and out of your bank account. This, in turn, can help you manage spending money only after you’ve earned it.

While paycheck budgeting is definitely ideal for some individuals, others would probably do better with a different strategy.

For example, if you have an irregular income, it may be a struggle to assign expenses to a specific paycheck when you don’t earn a regular paycheck.

How do you get started with budgeting by paycheck?

Ready to start budgeting by paycheck? Here are the steps to follow:

1. Grab a blank calendar

You can use a printable calendar, a monthly budget planner, or even a digital calendar. You can also use a spreadsheet. Learn how to create your budget calendar here.

Remember: The best budget planner is the one you’ll actually use. So, if you prefer things digital, skip out on buying the pretty-looking agenda and just use your Notes app since you know this is where you’ll look regularly.

Or, if you know you prefer pen and paper, don’t let yourself get distracted by flashy apps.

Instead, get a dedicated notebook to track your budget and keep it in a place that’s easily accessible.

2. Add your paychecks and bills to your calendar

Add all of your paychecks to the appropriate date on the calendar, along with the specific paycheck amount.

Next, add your regular monthly bills to their due date on the calendar. Regular monthly bills include your fixed expenses, such as rent or mortgage, insurance, debt payments, car payments, student loans, etc.

3. Tally up your total expenses

Calculate your monthly variable expenses, such as groceries, eating out, gas, and entertainment. If you aren’t sure how much you normally spend, go through your last few months of bank statements and find an average.

You can also divide your variable spending into multiple expenses. If you normally grocery shop once per week, you can add a grocery spending category to your cash calendar as a weekly expense rather than accounting for the whole month at once.

4. Include savings and sinking funds

Ideally, you’d be putting money aside each month to fund an emergency fund and sinking funds. These are some of the most important budget categories that you don’t want to miss!

While there’s no specific date that you have to fund these, choosing a consistent date can help you stick to your savings habit. You can even use an automatic transfer to make the commitment easier.

5. Assign each expense to a particular paycheck

You can use multiple highlighters to color code your calendar. Highlight each expense in the same color as the paycheck you’ll use to fund it. Keep in mind that you won’t necessarily pay every expense with your most recent paycheck.

Let’s say that you get paid equal amounts on the 1st and the 15th of each month, but most of your bills are due in the first half of the month.

In that case, you’d probably use some of your second paycheck each month to pay bills in the first half of the following month.

Expert tip: Use cash envelopes

Using a combination of the paycheck budget and the cash envelope system is a great way to help keep your spending in check. With the cash envelopes system, you put cash into different envelopes depending on how much you want to spend on each budget category.

For example, you may put $300 in an envelope for groceries and $150 in another for fun money. Note that the cash envelopes system doesn’t usually work for bigger expenses, like mortgage payments, car payments, or student loans. (Unless you pay these expenses in cash!)

Instead, you can keep track of these bigger expenses in a simple budget template.

How do you handle unexpected expenses?

The budget-by-paycheck method is a great way to get intentional about your spending and ensure that your spending aligns with your income.

However, regardless of the budgeting method you choose, there’s no avoiding the risk of coming across unexpected expenses.

Whether you’re paying for unplanned car repairs or a medical bill you didn’t know was coming, these emergencies are practically inevitable.

So, how do you handle these unexpected costs in the paycheck budget method? You can create two new budget categories: An emergency fund and sinking funds.

Protect yourself from unexpected expenses with an emergency fund

First, be sure to set aside money in an emergency fund. If you don’t already have one (preferably with 3-6 months of living expenses), then you can make room in your budget to start setting aside some money each month.

Then, when those small and large emergencies pop up, you can pull from your emergency fund.

Prepare for unexpected spending with sinking funds

Another way to avoid an unplanned expense throwing off your budget is by creating sinking funds. The basic premise of a sinking fund is that you take an expense that comes up irregularly and set aside money for it each month.

For example, think about Christmas on a budget. Rather than paying for all of Christmas with your December budget, you can set aside a small amount of money each month all year long.

You can use sinking funds to save for any expense that only comes around once in a while.

For instance, use it for annual expenses like Christmas, biannual expenses like car insurance, and irregular expenses such as car and home repairs.

Add a buffer to your budget

The final way you can handle unplanned expenses with this method is to include a buffer in your budget.

In other words, allocate a set amount of money as a buffer for each paycheck. If a small emergency pops up, you can use that money to cover the cost. If nothing comes up, you can put that money into your emergency fund.

Best tools for setting up a paycheck budget

There are tools available for just about every budgeting method you can imagine, and a paycheck budget is no exception. Let’s talk about a few tools that might be particularly useful for this type of budget:

A monthly calendar

The entire premise of this budgeting method is assigning expenses to a specific paycheck based on the date they come out of your bank account.

Because of that, a calendar lends itself particularly well to this type of budget. You can use color coding to make this method especially easy to keep track of.

Budget templates

There’s no shortage of the best budget templates and printables available these days. No matter what budgeting method you use, you’re sure to find several free and paid options on the market for your method of choice.

A budgeting app

If you prefer digital tools, a budgeting app might be the right choice for you. There are many apps that lend themselves especially well to the paycheck budgeting method.

You can find them by searching in your phone’s app store, filtered by best reviews. Some great ones include YNAB (You Need a Budget) and the Every Dollar app.

How much of your paycheck should you budget?

You should budget your entire paycheck.

In other words, every dollar of your paycheck should be accounted for! This means keeping track of how much you spend on fixed expenses (like rent), how much you spend on discretionary expenses (like restaurants), and how much you save. Using dedicated budget templates and tools can help you stay on track.

What is the 50-30-20 budget biweekly?

With the 50-30-20 rule or budget, you divide your after-tax income into three categories: 50% for needs, 30% for wants, and 20% for saving. You can combine the 50-30-20 budget AND the paycheck budget by following the 50-30-20 budget biweekly. You’ll divide up your after-tax income every time you get a paycheck.

Articles related to budgeting

If you found these budgeting ideas helpful, check out our other posts next!

• How Much Should You Save From Your Paycheck?
• How To Stop Living Paycheck To Paycheck
• How To Make A Budget Calendar Work For You
• Always Running Out Of Money Before Your Next Paycheck? Do This!

Creating a budget by paycheck may work for you!

The paycheck budgeting method is an easy system to start with. It is also an effective way to be intentional about where your money is going so you can make more progress towards your financial goals.

For anyone who lives paycheck to paycheck or struggles with spending money before you’ve earned it, this is a great strategy to help you get back on track. Be sure to check out our top budget quotes to keep you inspired as you work on your budget!

The post How To Budget By Paycheck: 5 Key Tips For Success appeared first on Clever Girl Finance.

If you don’t feel like you truly have a strong handle on your finances, one possible cause for that is using a budgeting method that doesn’t work. While not everyone needs a to-the-penny balanced budget, some type of budgeting strategy or template is really important if you want to know where your money is going month after month.

The 70-20-10 budget is one of numerous budgeting frameworks out there, and it just might be the tool you’re looking for.

If you’ve attempted to make a budget in the past and “failed” due to budget challenges, maybe it’s time to rethink your plan. You can succeed in budgeting—you just need the right way to do it for you.

What is the 70-20-10 budget?

The 70-20-10 rule is excellent for someone who doesn’t want to watch every cent of spending across thirty-five different categories. It’s a pared-down, simplified version of budgeting.

If you’ve ever looked at a sample budget and thought, “This is just too complicated,” then perhaps this budget will be a good compromise. Maybe you’re someone who wants to know how to manage your money, but you don’t want to be bogged down by micro-management.

The 70-20-10 budget refers to the percentage of your take-home pay that you devote to each of three major categories: spending, saving, and giving. That’s it.

(If you’d like an even more streamlined budget plan, you could check out the 80/20 budget and apply it to your budget instead.)

If you choose this budget, you would allocate 70% of your monthly income to spending, 20% to saving, and 10% to giving. (Debt payoff may be included in or replace the “giving” percentage if that applies to you.)

Let’s break down how this budget could work for your life.

70% of your income is for spending

With this rule, you will live on 70% of your income. More accurately, 70% of your take-home pay, or net income after taxes, not pre-tax income.

So you need to fit all of your necessities in this category, along with any luxuries that cost money.

Once you know your weekly or monthly income, you can do the simple math of calculating how much 70% would be. That’s the figure you need to keep all of your life’s expenses under.

Types of expenses to include in the 70-20-10 budget

Anything you spend money on goes under this category. All budgeting apps and strategies address this, of course.

Here’s a starter list of the most common expenses to include with the 70-20-10 rule:

• Rent/mortgage
• Car expenses and payments
• Insurance premiums
• Utilities (electricity, water, garbage removal)
• Fuel/Transportation
• Groceries
• Child care
• Dining out
• Clothing
• Entertainment
• Student loan payments (minimums)
• Other debt payments (minimums)
• Gifts (unless you keep this exclusively for the 10% Giving category)
• Travel
• Subscriptions or memberships
• Hobbies

Feel free to add any other discretionary spending categories you wish.

Fixed vs. variable expenses

One way to break down your spending category is to look at your fixed and variable expenses.

Fixed expenses

Your fixed expenses are the ones that have a set amount to pay every month. These are the “easy” expenses to calculate because their cost doesn’t change when living month to month. 

You usually can count on your mortgage or rent staying the same every month, for example, unless your landlord has to raise the rent occasionally.)

Examples of fixed expenses include:

• Rent or mortgage payment
• Car payments or car loan
• Insurance premiums
• Membership fees (to professional organizations, gyms, etc.)
• Subscriptions (magazines, trade publications, etc.)
• Child care (this is a fairly fixed amount, though you might add more for an extra babysitting night here and there)
• Utilities (usually variable, but can be fixed if your utility company offers a program that estimates your average monthly cost so you pay a more regular amount)

Variable expenses

Variable expenses are those that can fluctuate depending on circumstances. You may spend more on dining out during the holidays, for example, even if you’re doing Christmas on a budget.

Your utility bills may decrease during more temperate seasons of the year and go up during extreme cold or heat. Variations may be due to your spending choices but sometimes are due to factors outside your control.

Examples of variable expenses include:

• Groceries
• Fuel/Transportation
• Dining out
• Utilities
• Entertainment
• Clothing
• Gifts
• Travel

The key to remember for all of your expenses is to keep the total at or below 70% of your total take-home pay in any given month. If you have any extra leftover, you can decide whether to spend it as fun money or send it to pad your savings or giving category.

20% of your income for saving

The second category is much smaller but no less important than your spending. With this budget, you plan to save 20% of your total income.

It is a great goal to set. American households do seem to prioritize some savings on average, but saving more is never a bad idea.

Although starting with saving 10% of your income as part of the 10% rule is better than nothing, increasing that amount to 20% gives you that much more wiggle room.

Of course, one of the major hurdles many people face in saving money is that they may not know how to save money when their income is low. It’s really tough to save when you’re living paycheck to paycheck.

So don’t beat yourself up if you haven’t been able to put any money aside in the past few years.

However, everyone should aim to save a decent portion of their income. We all need an emergency fund, and to save more long-term (think: retirement). Consider some of these ways to save.

Include an emergency fund as part of your 70-20-10 budget

Although there aren’t many hard-and-fast personal finance “rules,” having an emergency fund is always essential. You need to start with an emergency fund before any other savings. Your emergency fund is that sum of money that you can draw from in case of, well, emergencies.

Having to have your car towed after a breakdown on the highway would be one example. Calling a plumber to fix that leaky faucet, paying for a sudden medical co-pay, or buying a plane ticket to a beloved family member’s funeral may all be emergency situations.

In addition to emergency cash to cover you when one or two unexpected costs come up, you need to build what some call a “full” emergency fund.

For example, you might begin with a small fund of $500 or $1,000 as a first milestone. That’ll provide a bit of peace of mind.

But what if you’re concerned about losing your job? Or both you and your spouse get laid off? You might need money to cover your bills for weeks or months.

A more robust emergency fund is usually 3-6 months’ worth of basic living expenses.

When calculating how much you’d need for 3 or 6 months’ worth of expenses, your budget will come in handy. For this, you want to stick to a bare bones budget: mortgage/rent, transportation to work or job interviews, groceries, and any other non-negotiable expenses.

A note: be sure to keep your emergency fund in an easily accessible account. (Don’t put it into a retirement account where you won’t be able to get the money out for years.) A high-yield savings account is a good option for your basic emergency fund.

Sinking funds (for future expenses)

A different type of savings account to consider in your 70-20-10 budget are what we call sinking funds. These are for the various larger expenses that can crop up from time to time. You don’t always need $50 a month, but you might have to cover an expense of $500 six months from now.

It’s usually not a wise idea to funnel all of your sinking funds into your regular emergency fund, either. That might make it too easy to spend it on the wrong things. You can set up different types of bank accounts at the same bank for different types of sinking funds.

Then, simply set up automatic deposits into each one. Over time, whether it’s $5 a month, $50 a month, or even hundreds a month, that sinking fund will grow. The goal is to have enough money to cover costs you can reasonably expect but can’t always calculate exactly in advance.

Sinking fund examples

• House sinking fund (for regular repairs and updates to your home and appliances)
• Car sinking fund (save for the next car you’ll buy as well as for future auto repairs)
• Self-employment tax sinking fund (freelancers and self-employed people must pay quarterly taxes on their own)
• Wedding sinking fund (for hosting a wedding or the costs of attending future weddings)
• Gift sinking funds (you might save all year for sustainable Christmas gifts, for example)
• Kids’ activity sinking funds (save year-round for those summer camps and club fees, as well as experience gifts for kids)

Sinking funds may seem like a lot to handle after filling up your emergency fund, but they’re worth the effort. They’ll make it less likely you’ll dip into your emergency fund because you’ve prepared for these types of expenses. Plus, the expenses that happen “every so often” won’t come as such a surprise.

Retirement savings

Within the 70-20-10 budget, you can also put some of your 20% into retirement funds. Once you’ve set up your emergency fund and a few sinking funds, get to work on retirement.

Retirement is a huge goal to prepare for, but the sooner you can start learning tips for retirement planning, the better off you’ll be. Time is one of the most powerful tools in retirement savings. You want to give your investments time to grow through compound interest and stock market returns.

401(k)

The 401(k), 403(b), and 457(b) are some of the most common retirement accounts. These are excellent retirement savings tools, but you must have the option of one through your employer.

401(k)s offer the opportunity to save for retirement before taxes. The money goes directly from your paycheck into an investment account, reducing your taxable income. Some employers even offer 401k matching for your contributions, which is basically free money!

Keep in mind that these accounts are tax-deferred, not tax-free. So you save on taxable income now, but when you retire and begin withdrawing the money, you’ll pay taxes then.

In addition, there are 401k alternatives, and we’ll talk about some of the best in the next section.

IRA and Roth IRA

Along with a 401(k) or similar employer-sponsored plan, many people in the U.S. can save in an Individual Retirement Account (IRA). There are traditional IRAs, in which you can save yearly for tax-deductible contributions.

Roth IRAs are another option, which works similarly. The difference between traditional and Roth IRAs is that the Roth IRA is taxed upon contribution, but you can withdraw the money tax-free once you retire.

Other types of IRAs exist, including the SEP-IRA, for those of us who are self-employed.

For Roth and traditional IRAs, the government limits how much you can contribute per year. In 2024, the maximum is $7,000, or if you’re 50 or older, you can contribute up to $8,000, according to the IRS.

College savings for kids

Another major savings “bucket” to keep in mind when starting a family is that you may want to start a college account for your children. Remember that paying for college is generally not mandatory for parents, but as a parent, you probably want to help your kids out if you can.

After covering all of your expenses and other essential savings (and don’t neglect retirement), you can move on to college savings. Help your kids get a great education and also learn how to avoid student loans.

As with any type of savings, when it comes to college planning, the earlier you begin, the better. That doesn’t mean you shouldn’t save anything if your child is already in high school, but starting when they’re younger is best.

Custodial accounts and 529 plans are two of the best options for parents of kids who may someday attend college.

Custodial accounts

One strategy parents can use for college savings is a custodial account. It’s an investment account that a parent or other adult can start on behalf of a child in their life. The child will take over the account at a certain age—usually either 18 or 21.

You should read all the details of a custodial account before opening one for your child. There may be gift taxes involved, and the child may also need to pay taxes on earnings eventually. But one great thing about custodial accounts is that they don’t need to be used only for college.

A custodial account can be great if you want to keep options open for your child.

In case they decide to pursue an alternate path like the military or opening their own business right after high school, this might be more useful than a 529 plan.

529 plans

A 529 plan is often considered the top investment vehicle for parents to help send their kids to college. If you’re a parent, you can open a 529 account for your child very early and let the funds grow until they’re ready to hit the campus.

There are great tax advantages to 529 plans. The earnings in the account are federal income tax-free as long as you only withdraw the money for eligible educational expenses.

The longer your money is invested, the better the returns you can earn on your money, meaning your savings will stretch farther.

So, a part of your 70-20-10 budget can involve saving for your kid’s college education. Remember, in this budget, you’re contributing from the 20% bucket to the college fund. You might only use 5% of your income here, but stick to that 20% maximum.

Stock investments

Investing in the stock market is another avenue for you to start building wealth. It’s best to focus on other steps first, such as your emergency fund and investing in an employer-sponsored retirement account. But investing on your own in the stock market is another option if you’re at that point.

You can try your hand at more stock investing by signing up with a robo-advisor, which picks your bundle of stocks to buy based on the information you give them. You can check out the best stock research websites to invest money in the stock market.

Another means of getting some money into the stock market is with index funds. Investing with index funds is a way of investing in a basket of stocks or bonds that are meant to perform similarly to the overall stock market.

In other words, you invest in the fund to hold a piece of multiple companies, hoping to earn good returns on your money because you have a variety of companies’ stock.

As you prepare to dive deeper into the work of stock market investing, check out these investment terms you should understand!

Real estate investments

If investing in real estate sounds intimidating, it doesn’t have to be that way.

Although real estate investing for beginners can include buying a property to rent out for income, people can now invest in real estate in smaller ways.

Real estate appeals to some investors because, unlike the stock market, real estate is a tangible asset. It’s an actual piece of property that will theoretically always have some value.

As you begin with real estate, you might put some of your saved money into a real estate investment trust or REIT. It’s quite similar to investing in the stock market but in companies specifically working in real estate. The process for you as an investor is much like that of buying index funds, which is easier than buying a property and becoming a landlord.

Crowdfunding is another easy way to dip your toes into real estate syndication investments with your 70-20-10 budget.

Of course, you may be ready to pursue buying physical real estate, which can be a good option as well. Be sure to do plenty of research, as it’s not a truly passive form of income and not for everybody.

However, owning property can be a lucrative way to start wealth accumulation over time.

10% of your income is for debt payoff or giving

In the 70-20-10 budget, the final 10% of your money is earmarked for extra debt payoff. Or you may choose to use this 10% for giving. It may mean donations to charity or gifts to loved ones for weddings, graduations, and the like.

Debt payoff

Depending on your finances, you could include debt repayments within this 10% category.

However, this doesn’t mean you can only spend less than 10% of your income on debt. You might remember that student loans and other debts were included in the 70% expenses category.

Your student loans and other debts are obligations, so you want to include the minimum required payments in your spending.

In addition, if the minimum payments aren’t getting you out of debt fast enough, you can send extra money to speed up that process.

You can choose how to calculate this final 10% of your income. If you are facing a lot of debt, you could focus on how to pay off credit cards fast rather than giving. In particular, if your debt comes with a high interest rate, it’s a good idea to pay it off quickly.

If you’ve carried a lot of debt, you probably have experienced some levels of debt stress. Figuring out the right game plan for you with the 70 20 10 rule can help you get on the path to living debt free.

Debt snowball method

One popular method for debt payoff is known as the “debt snowball worksheet.” Popularized by many a personal finance influencer, the debt snowball means you pay off your debts in order, from smallest to largest.

The magic of the debt snowball is that you start with the smallest of all your debts, no matter what the interest rate is. That may mean paying off a $75 parking ticket first. That may be small, but that gives you a feeling of accomplishment.

The snowball is all about emotional wins. When you have a large amount of debt, it can feel suffocating. You might think you’ll never break free. But each time you pay off a debt, you can be proud of yourself, gain motivation for saving money, and face the next debt.

It takes time, but those little wins can fuel your drive to keep going as the debts grow larger.

Debt avalanche method

Some people praise the debt avalanche vs snowball method of debt payoff. It’s similar to the debt snowball, except that it focuses on the interest rate of each debt versus the amount of each debt.

Your interest rate on a debt is how much you’re being charged by the lender to borrow their money. The higher the interest rate, the more you’ll pay overall.

With the debt avalanche, you want to look at all of your debts and check the interest rate on each one. Then, focus any extra money you can on paying off the highest-interest debt first. For many people, this is credit card debt.

With the debt avalanche, you should end up paying less overall.

However, you might grow discouraged if it takes a long time to pay off your highest-interest debt. Which debt reduction strategy to use can depend on your personality and what method will help you to succeed.

Keep in mind, when using the 70-20-10 budget, your minimum debt payments come out of your spending category. The extra 10% category for debt involves extra payments to get out of debt quickly.

Giving or sharing

A part of your final 10% category can go towards giving to something meaningful to you. It can be a formal type of giving, with regular monthly amounts to the same organization, or you might like to vary your giving monthly.

Religious tithing or giving

Many people make giving to their house of worship a priority. Some religious traditions call this a “tithe” (which simply means a tenth of your money). But whether you give a full 10% to one church or religious organization is really up to you.

Donating to charitable causes

Another part of your giving may be in the form of donations to charities or nonprofit organizations.

You can choose one with a mission that resonates with you, whether that’s helping victims of domestic violence, digging wells in Kenya, feeding the hungry in your hometown, or one of the hundreds of other causes.

Advantages

So, what are the main benefits of using this budget to learn how to manage your money? Let’s discuss some of the primary reasons you might like this budgeting method.

The 70-20-10 budget is simple to use

The 70-20-10 budget is pretty simple to understand and use. Keeping only three basic categories can make budgeting feel less like a chore and more doable, especially if you hate budgets.

Spending, saving, and giving are generally the three main categories people talk about when discussing why personal finance is important. Sure, there are plenty of ways to divide up those areas, but starting from those broad sections might make budgeting feel manageable to you.

Less restrictive than other budgets

A budget like this might work for you because it can feel less restrictive than other budgets. Other budgeting tools or programs may require you to make thirty different categories for your money and keep track of every single penny you spend.

This budget gives you a general framework that can help you with organized finances. But it gives you a lot of freedom within the framework. Spending 70% of your income, you can divide up the spending categories any way you like.

Disadvantages

As with most things, the 70-20-10 budget might not work for everyone. Here are a couple of negative aspects of this kind of budget strategy.

Some prefer a more detailed budget

You may have read the above section and thought the 70-20-10 budget is just too simple for you. You may prefer breaking down all of your income and spending in a much more detailed and specific manner.

If you think your personality fits better with stricter, detailed planning, then try a more complex budgeting template. The goal here is to create better budgeting with your money, not to fit yourself into a mold that isn’t right for you.

Not everyone can live on 70% of their income

Now, here’s a tough truth about finance: for some of us, 70% of our income isn’t enough to live on. If your income isn’t at a level that allows you to pay the bills at 70%, then this budgeting rule won’t work.

You could also try to adjust this plan slightly if income is tight. Perhaps an 80-10-10 budget would be a good alternative (spend 80%, save 10%, give 10%).

The 70-20-10 budget can be good for many people, but when you’re struggling with bills piling up, you likely won’t be able to save 20% or give 10%. And that’s okay.

70 20 10 Budget example

Knowing how this budget works and understanding the pros and cons is great. But maybe you want to see what this budget looks like in a real-life scenario. Here’s an example:

Let’s say your income is $5,000 a month after taxes. By this rule, $3,500, 70% of your income, would be for all expenses. Then 20%, or $1,000, is for saving. Last, $500, or 10%, is for giving or debt payoff.

So your budget might look something like this:

Essentials: $3,500

• Housing cost $1700
• Utilities $200
• Insurance $200
• Transportation and car payment $500
• Groceries $600
• Subscriptions $50
• Minimum debt payments $200
• Fun money $50

Saving: $1,000

• Emergency fund $300
• IRA $300
• Saving for child’s college $200
• Sinking fund for travel $200

Giving: $500

• Giving to religious organizations $250
• Giving to a charity $250

You can use whatever budget categories make the most sense for your income and lifestyle. But this example gives you an idea of what this rule might look like.

Expert tip: Calculate your income before setting up your 70-20-10 budget

A good first step to take before breaking down all of your spending, saving, and giving? Figure out how much money you make in after-tax income. You can look at pay stubs if you’re not sure of the precise amount.

If you’re practicing budgeting for couples, be sure to factor in a spouse or partner’s income if you share the household income and expenses. If your income is variable—for example, if you take on freelance gigs or work in an unpredictable field—make your best estimate for an average monthly income. You might err on the low side of that income range just to be on the safe side.

How is the 70-20-10 rule similar to 70-10-10-10 rule?

The 70-10-10-10 rule for money is very similar to the the 70-20-10 rule. But 70% of your income is for expenses, and the other three 10 percents (10-10-10) are for various categories, including giving, investing, and saving. You may choose to focus on different things in each of your 10% categories, including an emergency fund, retirement accounts, etc.

So, as you can see, this rule is very similar to the 70-20-10 rule. It’s just that the way you break up the percentage numbers is slightly different.

Articles related to budgeting methods

If you learned more about percentage budgeting from this article, read these next!

• How To Use Budget Categories
• Sinking Funds: Why You Need Them. How To Set Up Yours!
• 21 Sinking Fund Categories to Consider In Your Budget
• The 50-30-20 Rule: How It Works + A 50 30 20 Budget Template
• 10% Rule: Is Saving 10% Enough?

Give the 70-20-10 budget a try!

By now, you probably have a good idea of whether you like this 70-20-10 budget. It’s a fairly simple and straightforward method of budgeting. Consider the type of budgets you may have tried in the past, and think about your financial goals and examples of financial goals as you decide.

Going through your current financial situation can help you to create a financial planning process. Your money is too important to leave up to chance, so give it a shot and try some new budgeting ideas.

You might also find a different approach to managing your money. There are several other different budget rule ideas to try out, including the following:

• 80/20 budget
• 60-30-10 rule
• 60-20-20 rule
• 50-30-20 budget
• 30-30-30-10 budget

Learn how to create a budget that’s best for you with our completely free budgeting course! Remember that budgets are personal, and even if it takes some time to find the right one, it will be worth it when your finances are in good shape and you feel more in control of your money.

The post What Is The 70-20-10 Budget? appeared first on Clever Girl Finance.

Turning 40 is a time to celebrate all that you’ve accomplished in life so far, live your best life, and look forward to all the adventures still ahead of you. And one of the best ways to celebrate a milestone birthday is to throw an amazing, unforgettable fiesta! If money is tight, don’t worry, there are plenty of 40th birthday party ideas on a budget you can use to throw a fabulous bash without spending a fortune!

Let’s get into these awesome ideas for a 40th birthday!

1. Picnic in your backyard

What’s one of the simplest 40th birthday ideas on a budget? Host a picnic in your backyard! You can keep costs down by providing simple food and drinks and asking guests to bring their own chairs or blankets.

And don’t forget the games! A few classic picnic games like frisbee or tag will keep you and the kids entertained.

If you’re looking for 40th birthday party ideas on a budget that don’t cost the earth, this one is a no-brainer.

2. Barbecue party to grill your favorite foods

Everyone loves food on the grill! Burgers, hot dogs, steak tips… you name it. Throwing a barbecue party is a great birthday party idea since it’s relatively easy to organize, and everyone is sure to have a good time.

All you need is some food, drinks, and 40th birthday decorations, and you’re ready to go! Plus, you can save money by making it a frugal meals potluck and asking your guests to bring some food, snacks, or dessert.

3. Movie night

If you’re thinking, “I need money desperately,” but still want to treat your guest to a personalized 40th birthday party, you can host a movie night at home and watch some of your guests’ favorite classic films.

Top Gun? Back to the Future? Dirty Dancing? You betcha!

All you need is a projector and some movie snacks! It is definitely one of the most awesome ideas for 40th birthday celebrations if you prefer more intimate and chill parties.

4. Gaming or board game night with friends and family

Monopoly, Scrabble, Settlers of Catan, Uno… the list goes on! Gather up all your gaming supplies and have a good time trying out game night ideas with the closest people in your life. These 40th birthday party ideas on a budget are easy to arrange.

If you’re looking to spice things up, make it a drinking game and take a drink every time somebody loses in cards.

5. Sip and paint night

A sip and paint night is a unique and fun birthday idea that you should definitely consider. You can invite all your friends over, have them bring their favorite bottle of wine or two with them, then give everyone a canvas and let the painting commence!

Sip and paint is not only an excellent idea for what to do for 40th birthday celebrations for yourself, but it’s also a great way for everyone at the party to have fun, too.

6. Karaoke your heart out

Hosting a karaoke night is one of the most fun 40th birthday ideas on a budget and is the perfect way to celebrate! You can invite all of your friends and family to join in on the fun. Karaoke is a great way to get everyone up and singing, and it’s sure to be a night you’ll never forget.

Put together a list of 40 of your fave karaoke songs for your 40th so you’ll love the playlist for the whole evening. Whether you love pop, rock, or alternative music, this will be a real blast.

7. Bowling night

When you’re looking for an affordable birthday party idea, consider bowling. It’s inexpensive but also a great way to get people involved in conversation while they wait their turn at the lane.

Plus, there are plenty of places that offer both discounts and group packages, which can make your life easier if you’re on a budget.

8. Escape room exploration

If you want an unforgettable experience, consider exploring an escape room. These interactive puzzles provide a unique challenge that is perfect for groups of friends or family.

You and your guests will have a blast working together to solve the clues and escape before time runs out!

9. Amusement park trip

For many people, turning 40 is a time to reflect on the past and plan for the future. It can also be a time for celebration, and what could be more fun than spending a day at an amusement park with friends and family?

Whether you’re young at heart or just young enough to enjoy the rides, an amusement park is one of the most thrilling 40th birthday ideas on a budget. Be sure to use sites such as CityPass to save on tickets!

10. Adventure day

Still looking for 40th birthday party ideas on a budget? One of our favorites is to go on an adventure day!

Visit a new city, go camping, or explore a new area of town with your family and friends! What’s better than taking off into the great unknown?

Whether you’re driving to another town or exploring a local park, the exploration of an unknown place is always exciting. Be sure to take lots of photos to reminisce on the beautiful memories for years to come. You can find all kinds of fun things to do for free in a new town by checking online!

11. Masquerade ball

Nothing says celebration like a good old-fashioned masquerade ball. Put on your best mask and enjoy a night of intrigue and mystery. You can decorate with gold balloons, candles, and table centerpieces for a festive flair.

Moreover, there are so many budget-friendly possibilities for costumes. You can go as anything from royalty to a Venetian gondolier. I’m sure your guests would have tons of fun!

12. Hollywood glamour Party

Think glamour, glitz, and old-school Hollywood. Get inspired by classic movies like “Casablanca” and “The Great Gatsby.” You can have everyone come dressed in vintage outfits from their favorite Hollywood costume or an outfit from any era.y

If you want to go all out, you can even rent some props and set the scene like a movie studio backlot. When it comes to 40th birthday party ideas on a budget, this has to be one of the most stylish. Go on — add a little pizazz. 

13. Throwback 90s hip hop party

Anyone celebrating their 40th birthday will remember the classic 90s hip-hop tunes we grew up listening to. So why not host a throwback 90s party for your birthday? It’s a great way to celebrate in style.

You can have all of your guests over and listen to music from the 90s, dance the night away, and enjoy snacks and drinks. And don’t forget to wear your best baggy jeans or tracksuit to show off how you can be fashionable on a budget.

14. The 70s disco fever

It’s time to get your groove on! A 70s disco dress-up theme party is the perfect way to celebrate everything that is funky, cool, and groovy about this decade.

From dancing in the streets to bell bottoms, polyester suits, and afros, there are so many options for this theme. You can go all out with a full costume or just rock some of your favorite ’70s attire.

Perhaps you could start upcycling fashion to make a sweet ’70s outfit. This party will be one for the books!

15. Carnival party

If you’re looking for a unique way to celebrate your birthday, why not throw a carnival-themed dress-up party?

Make it even more fun by decorating your home with circus-themed 40th birthday party decorations and serving classic carnival food like hot dogs and popcorn. You can also have fun games and activities for your guests to enjoy, such as ring toss or balloon popping.

16. Year of birth retro party

Celebrate 40 years of being alive by reminiscing about the year you were born. Granted, you won’t actually remember it! But it’s a fun theme to play around with.

Have your party guests dress in costumes from that year, get your party playlist on, and maybe even play around with a nostalgic menu. Vol au Vents and Chicken Française, anyone?

17. Concert viewing party

Do you love live music? Taking all of your friends to a concert may be out of reach.

However, that doesn’t mean you can’t have the same experience at home. Invite your besties over to enjoy a special screening of your favorite artist for your 40th birthday. 

Not sure where to start? You can purchase Beyonce’s World Tour on Amazon.

Simply search for the concert you have in mind, rent it, and host a night to remember. 

18. Create your own photo booth

When you’re coming up with new ideas for 40th birthday celebrations, don’t miss this one. You want to ensure you have loads of snaps of the big event. Why not create your own photo booth from scratch?

The good news is that you don’t need a ton of money to get this right.

Start out by getting some props online — you can buy a range of photo prop packs on Amazon. Next, get a Polaroid camera and some film.

If that is too expensive, take the pictures on your phone!

19. DIY casino night

Is luck on your side? If you can’t quite afford to take a trip to Vegas for your birthday, a better way is to bring the casinos to you instead. 

You can buy roulette games online for less than you might expect. Invite your friends around for a casino-themed party, and don’t forget your costumes.

20. Cocktail-making at home

If you’re a fan of fancy cocktails, here’s one of the best 40th birthday party ideas on a budget. Why not host a cocktail-making session at home? 

There are two main choices here… You can make one cocktail or ask your friends and family to bring their own recipes and ingredients. 

If you throw a themed party, you might even want to have themed cocktails. It’s a fun activity that your party guests will enjoy. 

Tip: Make some mocktails for anyone who is pregnant or doesn’t drink! You need to cater to everyone’s needs. 

21. 40th birthday dinner party on a budget

There’s no shame in getting to 40 and preferring more of a traditional meal than a buffet. A small dinner party is a great chance to get together with your nearest and dearest to enjoy sumptuous food and fabulous company.

It still doesn’t need to be expensive, even if it does look fancy pants! You could have each dinner party guest bring a different course or perhaps invite them all to bring a bottle while you handle the food. If you love a bit of fizz, then Prosecco is a brilliant alternative to champagne.

Expert tip: When in doubt make a list of themes and activities

With a bit of creativity, throwing a birthday party without spending a ton of cash is easy! Simply think about what type of event you want and your interests, and then get creative with the planning to save money.

One of the best ideas for 40th birthday celebrations is to make a list if you don’t know where to start. Write down themes and activities you like, and see if something stands out. Then start planning your party from there.

Ideas to make a 40th birthday more affordable

When it comes to throwing a 40th birthday party on a budget, creativity is key. We promise you’ll have a fantastic time even if you only have a few dollars to spend. Here are a few tips for how to save money fast while still having an amazing birthday experience on your big day:

Have your 40th birthday party at your home instead of renting a space

One easy way to save money is to hold your 40th birthday party at your home instead of renting a venue. That way, you can control the food and drinks that are served, and you won’t have to pay for a location.

You can also decorate your home to match the theme of your party, which can add to the festive atmosphere.

Ask guests to bring food or drink to your 40th birthday party

When you’re wondering what to do for 40th birthday celebrations, hosting a party can be expensive, but there are ways of cutting the budget. One way is to ask guests to bring food or drink to the party. It saves you from buying everything yourself and can help keep costs down.

There are many different types of food and drinks that guests can bring, so everyone is sure to find something they like. Plus, it’s a great way for guests to get together and socialize.

Serve simple snacks and drinks rather than a full meal

Instead of serving full meals that take quite a bit of time and budget to make, you can instead set up a buffet table where your guests can help themselves to simple snacks.

It will help you to save money on food costs and make it easier for your guests to find something they like to eat.

Use decorations you already have around the house

One of the other creative ways to save money for your party is by using decorations you already have around the house.

For example, you can use tablecloths and tableware, ribbons, streamers, balloons, and posters to create a festive atmosphere. And don’t forget the confetti!

You can also make your own party decorations by using materials like cardboard, construction paper, and paint.

Provide your own 40th birthday party entertainment on a budget

Another fun way to save money on your birthday bash is by providing your own entertainment rather than paying for a band or other professional service. You could get a Bluetooth speaker and create your own music playlist for the party. You can also decide what games will be played, if any.

That way, you can have more control over the type of music or games that are played and who is involved. Plus, it’s a fun way to get everyone in on the celebration!

What items are needed for your 40th birthday party ideas on a budget?

The items needed for your party could differ depending on what type of party you’re hosting.

However, to ensure that your party goes smoothly, here are the most essential items and factors to consider during your party planning process.

A venue

Almost every party needs a venue. The perfect place to celebrate this momentous milestone is somewhere with plenty of space for guests to spread out and have fun.

It should also be private enough so that the guest of honor can enjoy their special day without interruption.

However, you can keep it budget-friendly by having your party at your home, a friend’s house, or a park if possible.

Food

A big part of planning what to do for 40th birthday celebrations is the food. For food, it’s customary to serve a mix of savory and sweet dishes. Finger foods are perfect for parties, as they can be eaten without utensils and don’t take up too much time or space on the table.

Last but not least, don’t forget your 40th birthday cake! Whether it’s shaped like the number 40, has 40 candles on top, or you serve 40 individual cupcakes instead of a multi-tiered centerpiece, it’s your call!

Drinks

Guests will also need drinks, so make sure there’s a variety of alcoholic and non-alcoholic options available. Also, don’t forget to prepare plenty of cups and wine glasses so you won’t have to worry about buying them last minute.

Music

Music is also important for a birthday party, as it sets the mood and helps guests get into the celebratory spirit.

The best way to make sure that you’re prepared is to make a Spotify playlist beforehand and also take into consideration the music taste of your guests or the theme of your party.

Decorations

Last but not least, decorations. To keep things cohesive, make sure that your party decor matches the theme of your party and makes the guests feel welcome and excited for a whole day of fun!

You can even search for decor inspirations on Pinterest to help you create amazing decoration ideas for your birthday. Remember to check places like the Dollar Store or Goodwill to save cash on decor!

How to save up money for a 40th birthday?

If you want to have a fun 40th birthday party but need to save up money, there are lots of ways to prepare, like a spending freeze. You can also try out a savings club or find other ways to save money on a tight budget. Even a side hustle or a couple of extra hours a week at work can help you throw the birthday party of your dreams!

What is a good menu for a 40th birthday party? 

A good menu for your 40th birthday party depends on your taste and the type of event you’re hosting.

For example, if you are going for a formal dinner, you might want to choose a classic, such as French or Italian food. Should you host a larger event, you may want to go for sharing dishes, such as charcuterie boards. 

Alternatively, you could make your event a potluck and have your friends and family each come with a special meal!

How do you throw a big birthday party on a small budget? 

To throw a big birthday party on a small budget, consider what you spend on. A large guest list can still be inexpensive when you’re mindful of the venue and food, which are two big costs.

Pick a free or inexpensive (but large) venue like a park or community center. Then, save by planning an inexpensive meal or asking guests to bring sides and desserts.

What makes a good 40th birthday party?

So long as you’re celebrating with the people who matter to you, you should have an amazing birthday bash. Remember, this is your event, so you make the rules.

You don’t have to go overboard if your budget is slim. There are plenty of ways to have fun, relax, and share in this milestone with your loved ones.

Articles related to inexpensive birthday ideas

If you enjoyed reading about 40th birthday ideas on a budget, you’ll love these articles:

• 18th Birthday Ideas On A Budget!
• Turning 40? Key Financial Steps To Take
• 22 Fun And Inexpensive Ideas For Days Out With The Girls
• 40 Fun Things To Do For Free With Friends

Try these 40th birthday party ideas on a budget and have a blast!

Hopefully, these 40th birthday party ideas on a budget have provided you with some inspiration for your upcoming birthday bash! Your birthday is a time to celebrate all that you have accomplished in life so far.

It’s also a time for looking ahead to the future, finding out how to plan for the year, and setting new yearly goals to have. And, of course, it’s a time for having fun with friends and family.

So make sure to have fun and enjoy this special day while also avoiding money leaks and overspending!

The post 40th Birthday Party Ideas On A Budget appeared first on Clever Girl Finance.

Budgeting isn’t just about making sure you have enough to pay the bills each month. It’s also about planning ahead for future expenses. While you should have an emergency fund, a smart way to save money each month is to set up different sinking funds categories.

Sinking funds allow you to put money aside each month for specific things.

In this article, you’ll learn about the different types of sinking fund categories. These can help you build out your budget and live debt-free.

Why do sinking funds categories matter?

According to PR Newswire, 80% of Americans have a budget.

But many don’t have enough money saved. In fact, YouGov claims that 12% of surveyed Americans said they have no savings, and 27% had less than $1,000 in savings. 

The purpose of a sinking fund is to save cash for specific expenses. That can include one-time or irregular expenses. The cash ideally should be broken up into categories.

For example, if you have a wedding coming up, instead of using your credit card, you can figure out how much you’ll need for related expenses. Divide that amount by the number of months until the event. Then aim to save that sum every month in your “wedding budget breakdown” fund. 

Setting up a few options from our sinking funds list may help you avoid spending money on the wrong priorities. You can focus on saving a specific amount for a specific purpose every month. 

One benefit of sinking funds is that you don’t have to pay for things all at once. Spreading out the cost can reduce the pain of major expenses and stop you from going into different types of debt. 

You set aside money from your paycheck each month (or whatever frequency you decide) toward a specific financial expense. That’s to ensure you don’t go over your budget when a big event, repair, or other expensive item comes up.

Rather, you’ll save the money slowly for upcoming expenses and save yourself from taking on long-term debt. The alternative for many people is paying by credit card, and high-interest rates then compound the amount you owe. 

Setting up a sinking fund with specific categories can help you take your budgeting skills to the next level. It forces you to itemize your monthly budget even further, rather than just dumping leftover cash into a savings account. Every saving goal can have its own sinking fund. 

You know you need to create sinking funds but are you clear on the sinking fund categories you need? Here’s a list to help you plan!

18 Sinking fund categories to review

There are many sinking funds categories to choose from. And you’ll probably think of a few more besides what we’re including here. 

They aren’t just for parties and can include recurring yearly expenses, emergency bills, car expenses, appliance updates, wedding expenses (which can be costly), and more.

Keep in mind that sinking funds are just one part of your overall budget. Your budget will likely have several different budget categories to help you plan your finances overall.

That said, here are some of the more common sinking funds categories that you could incorporate into your budget:

1. Transportation

One of the biggest expenses besides housing is transportation. Whether you own a car, take public transport, or use Uber on the weekends, it’s important to budget for your transport costs.

If you own a car, you can set up a sinking fund to pay for car expenses, maintenance, and unexpected car repairs. New tires or other replacements for your vehicle can set you back hundreds of dollars (at least). 

Your car sinking fund could include money intended for vehicle registration fees, parking permits, and car insurance. You might even set aside money to purchase a new-to-you car eventually (find out: what car should I buy?).

And for those who use public transport, you can set aside money for train or bus passes or ride-sharing apps.

2. Medical expenses

Another of the sinking funds categories to establish is medical expenses. Going to the doctor is expensive, especially during an emergency.

In fact, according to Affordable Health Insurance, over half of Americans surveyed have medical debt.

Even with good health care insurance, it’s important to set up either a medical Flexible Spending Account (see “What is a flexible spending account?) or a Health Savings Account (HSA). You can use it as a medical sinking fund so you don’t end up in debt due to medical expenses.

3. Christmas and the winter holidays

Christmas is a good example of sinking funds categories that come every year. Unfortunately, many people don’t prepare ahead of time, eating into their budget or savings to pay for the holidays.

No matter how much money you spend for Christmas, Hanukkah, or other major holidays, a sinking fund category for them can ease the pressure of that time of year. It’s a saving goal with a specific deadline each year. So you can follow a sinking fund savings plan all year long or use Christmas clubs. 

Determine how much you plan (or will be able) to spend for the holidays. Then divide that amount by 12 if you plan to save money every month. (If you start later than January, simply divide the amount of money by the number of months remaining.) 

Don’t forget about things like decorations, office gifts, Christmas dinners out, and travel expenses if you go to see family. Those can go above and beyond your general holiday gift budget. 

You may still encounter unexpected costs. But by setting up a sinking fund specifically for Christmas, you can incorporate Christmas on a budget into your monthly budget all year long.

4. Vacation

Another good example of sinking funds categories is vacations. Whether you hit the road every few months, plan a big annual trip or some other vacation pattern, planning is key. By budgeting for your time off months ahead of time, you can be even more prepared and avoid taking on debt. 

If you are planning a trip to Disney World on a budget or even Europe, it can be a big life event. And you probably don’t want to put it all on a credit card. 

Create a vacation budget and, as with many items for sinking fund ideas, divide the amount by the number of months until the trip. That will allow you to take your family vacation or girls’ trip without worrying about money, so you can truly disconnect and relax.

5. Childcare

Unfortunately, the average family spends about 27% of their household income on childcare, according to Care.com. (And 59% of parents said they expected to pay more than $18,000 per child in 2023!) 

The cost of childcare will be a factor if you’re a parent. So that’s another one of the categories you might consider. You can also include other costs of raising a child, like preschool fees (find out “how much does preschool cost?”), sports and activity registration, clothes, dental and eye care, summer camps, and more. 

While some childcare-related expenses are unexpected, like when your child has a sudden growth spurt, you can prepare ahead of time for many by setting up a sinking fund.

6. Braces

Not every child needs braces, but many do. Braces are very expensive, costing thousands of dollars.

You may spend even more if you have more than one child. So it’s worth it to add this expense as a financial goal.

If you have any children or are planning on starting a family, start saving early.

7. Utilities

It might not be the most exciting item of sinking funds categories, but utilities are a necessary expense that usually fluctuates throughout the year.

For example, if you live in an area with harsh winters, your electricity bill will likely be more expensive in the winter than in the summer. However, you can consider how to lower electric bill payments.

You can plan ahead for these moments by setting up a sinking fund in your budget. Figure out the average you paid last year and split it between 12 months. That way, you’ll already have the money in your account when your bills are more expensive.

(Some utility companies arrange this for you. They’ll estimate your total bills and divide up the estimated total equally among your monthly bills for the year. You can do this yourself within a sinking fund, though, if it’s not offered by your utility provider.)

8. Self-care

While a self care Sunday here and there doesn’t have to be expensive, if you like to get specific hair or spa treatments, then it might make sense to set up a self-care sinking fund. 

Massages, nail care, laser hair removal, and more are all expenses that can add up. So, incorporate your favorite ways of treating yourself into your budget by setting up a sinking fund.

When it’s not a necessary expense, it can make you feel better to save a little bit each week or month for that specific purpose. Then, you’re less likely to neglect those special treatments or activities due to money. 

9. Special occasions

Special occasions like a major anniversary or wedding might not happen every year, but when they do, they’re often expensive.

For example, retirement parties, bar mitzvahs, quinceaneras, or the average wedding cost might be tens of thousands of dollars. Depending on your family and societal expectations. Don’t feel that you have to blow your monthly budget to impress anyone, but do consider how you want to contribute to those big moments. 

You can start saving for these events several years in advance to help spread out the cost of these one-time expenses. (If you’re like me and have a lot of college-aged nieces and nephews, those graduations and potential weddings are future expenses to consider!)

10. Annual renewal expenses

Some bills are recurring expenses that happen every year, such as annual renewals.

For example, perhaps you have subscriptions to software or other memberships. Even if you pay them in a lump sum each year, you can make sure to have the money set aside each month to spread out the budget burden. 

Write in your calendar when the payments are made. Then, you can prepare well ahead of time for anything that is a recurring expense.

11. Clothing

Unless you’re doing a no new clothes challenge, you might want to make a sinking funds category for clothing. That can include general clothing, seasonal clothing like coats or shoes, or clothing for special occasions like weddings or work events.

While you likely won’t need to buy new clothes every month, setting money aside every month can help you be prepared whenever it’s time to replace worn-out clothing. That also goes for kids’ clothing. Since they outgrow items quickly, a sinking fund for their clothes is a good idea as well. 

12. Gifts

A birthday party or anniversary presents can show your loved ones you care. But they also can rack up bills and debt if you’re not careful. Plus, you may like to give gifts for other occasions like Valentine’s Day, Mother’s Day, Father’s Day, and other special occasions.  

Thankfully, this category is usually easy to save for. The amount of money you’ll need for gifts may be lower than for other sinking funds categories. 

However, this depends on the number of people in your life, so no matter what, a budget item for gifts can help. Sustainable Christmas gifts and experience gifts for kids are great options, but that doesn’t always mean they’re free!

13. Home maintenance

If you’re a homeowner, you will definitely need to do some maintenance eventually. Home maintenance is one of the best categories because it works like an emergency fund but for the specific purpose of your home. 

A sinking fund lets you plan ahead for inevitable home maintenance bills. Unexpected bills for plumbing, windows, garage doors, or even a sinking foundation (ask me about that one!) can put a dent in your finances. 

It’s typically suggested to save between 1- 4% of the value of your home each year for maintenance. With any luck, you won’t need to spend it every year. But the flip side is that some years, you might face multiple big home expenses at once. 

Making a sinking fund for specific home repairs you know you’ll need is smart planning. It’s also something to factor in when deciding, “Should I buy a house now?” as it’s another ongoing expense.

14. Home furnishings

Sinking funds categories may also include home decor like furniture or new appliances. A new couch or bed can be very expensive. Instead of wondering where the money will come from, plan ahead.

Setting aside a bit each month in advance is much less stressful and better for your credit score. This type of sinking fund is fantastic for homeowners to have because retailers put appliances and furnishings on sale at certain times of the year. 

By planning ahead as a homeowner, you can take advantage of sales and offers while respecting your budget. 

15. Charity

One of the sinking fund ideas you might not have considered is one for giving to others. Whether you give to a church, another charity, or both, you might want to have some cash saved for a good cause in a sinking fund account.

Even if you’re not currently giving to a charitable organization, a charity sinking fund can ensure that you have the funds if you come across an organization or cause you’d like to help out with. 

Some people save a certain amount of money each month in their “giving” or “charity” sinking fund. Then, any time during the year when a GoFundMe or other giving campaign occurs, you’ll have an account to draw from when sharing your generosity. 

16. Tuition

Some sinking fund categories can include education expenses like tuition. Education is expensive, especially for private schools. Once the person reaches college, the annual cost of attendance at a four-year school is over $26,000 for in-state colleges. 

Obviously, this is a massive expense to try to plan for. While student loans may be an option, and scholarships and part-time work can help, a sinking fund started years in advance will ease a lot of headaches. 

If you send your kids to private school or are saving for their college, then a sinking fund like a 529 college savings plan might make sense, rather than a traditional savings account. (Find out, “Is a 529 plan worth it?”)

17. Pet care

Your sinking funds list might include caring for your beloved pets. Our canine and feline companions may also need some care at some point in their lives, so this is another sinking fund example. 

Besides the obvious monthly food costs, you should also plan for yearly vet visits, vaccinations, and emergency veterinary care. While some people take out pet insurance, many prefer to incorporate the cost into their monthly budget by saving it instead. 

Having a sinking fund set up for your cat, dog, or other animal can help you care for them without added financial stress. Then, if your pet becomes sick or injured, it can be much easier to manage the added expense. 

18. Emergency fund

If you do not already have an emergency fund, you should definitely set one up.

In fact, you should start to fund this category before any of the others.

Emergency funds are types of sinking funds categories that can help you pay for any unexpected expense that you weren’t planning for.

In general, it’s recommended to have about three to six months of living expenses saved up. But you can save more or less depending on your personal circumstances. Some people, like freelancers, may prefer having a 12-month emergency fund in case of volatility in their field of work. 

You should only draw from your emergency fund when financial emergencies and costs come up that you didn’t know were coming. If you need new tires or brakes on your car, that’s an emergency. If you find out you are losing your job, use your emergency fund to pay essential bills while you look for a new one. 

19. Pregnancy or adoption

Growing your family can be super expensive, whether by pregnancy, fostering, or adoption. Even in the “ideal” circumstances, pregnancy comes with a lot of additional costs. 

If you’re at the stage of your life where you’re thinking of becoming a parent, it’s not a bad idea to begin saving for that specific purpose. A sinking fund for having a child can ease a big financial burden. 

Consider not only the medical costs that you’ll incur through pregnancy but also the cost of missing work for childbirth, even if you’re considering how to make money on maternity leave. Since U.S. employers aren’t required to pay you for family and medical leave, missing several months of work can be a hardship. 

There could also be complications with fertility, which aren’t always covered by health insurance. If you decide to pursue adoption, that also can be quite costly: private adoptions range from $30,000 to $60,000. 

20. Technology upgrades

You could include this in a more general sinking funds list as “life upgrades.” Still, since technology and electronics are so integral to modern life, you can make it a separate savings category. Whenever you need to replace a smartphone, laptop, e-reader, or other tech device, you might use a sinking fund to do so. 

In particular, remember this if you rely on certain electronic devices for your job. If you are working from home or work remotely, your job almost certainly requires a reliable computer and related devices, so be ready to replace those things regularly. 

21. Fun and entertainment

Here’s one of the more fun ideas: a literal “fun” fund. You can save in an account just for things in the entertainment realm that you know you’d enjoy. You might not know exactly what event will come up, but by saving even a couple hundred dollars for it, you can be ready when something exciting is available. 

Is your favorite band from your youth going on a once-in-a-lifetime reunion tour? You could use your sinking fund to purchase tickets. It enables you to enjoy this opportunity rather than pass it up. 

Expert tip: Use sinking funds to see your savings progress

Sinking funds are an excellent way to plan ahead for costs that you know are coming up in the future. By separating your savings into individual accounts, you can gain an accurate picture of your progress toward each savings goal. 

Although budgeting in general is awesome for planning and tracking your expenses, sinking funds can provide you with specific savings guidance. You can make as many sinking funds as you wish, depending on what makes sense for your current phase of life. 

Figure out a savings target for each one and contribute something toward that saving goal on a regular basis. Seeing that balance increase each week or month in your separate savings accounts can help you anticipate the accomplishment of reaching the amount of money you need. 

What is the best way to organize sinking funds?

It’s a good idea to organize and stash the money for all your sinking fund ideas in a high-yield savings account or interest bearing account. That way, the money is easy to access and will earn interest as it sits in the account. 

Keep an eye on the balance in each sinking fund. You might set up automatic deposits from your paycheck and then start tracking savings growth monthly. Your bank may even offer an easy way to organize sinking funds within a single savings account, so be sure to check whether that’s an option. 

How much should I put in my sinking fund?

The best way to determine how much to put into a sinking fund is to decide on the total amount of money you’d like to see in the account. It may be several hundreds or thousands of dollars, depending on the type of sinking funds category. 

If you have several months to reach your saving goal, you can divide the total by the number of months to figure out how much to save monthly. This tactic works for many categories, from vacations to events to holidays.

For others, like home maintenance or the “next new car” sinking fund, you might simply settle on a dollar amount each month until you actually need the money. 

What are the sinking fund expense categories?

Basically, sinking fund expense categories are expenses that you can plan for. They’re typically not emergencies, but that doesn’t mean they’re unimportant. And they can help you to “save money live better“!

Things like annual recurring expenses, one-time occasions like weddings or vacations, and replacements of things that wear out (cars, furniture) are great options. 

What number of sinking funds should I have at one time?

There isn’t a fixed number of sinking funds to recommend because it’s a personal finance decision. You get to decide how many sinking funds would be helpful for you. 

The key to the “right” number of sinking funds is, what can you handle? If you had a dozen sinking funds, that might be an awful lot to keep track of. For some people, three to five sinking funds may be the sweet spot. 

Another option, if you have too many things on your list, is to create one large sinking fund for everything. It doesn’t help as much in terms of visualizing your progress toward a saving goal.

However, it may be better to have one sinking fund to dip into instead of stressing about organizing 15 different sinking fund ideas at once!

Articles related to saving money for specific things

If you learned more about the various savings categories and want to find out more information, check out these articles next!

• Sinking Funds: Why You Need Them. How To Set Up Yours!
• How To Use Budget Categories
• Building An Emergency Fund: A Quick Guide
• Are You Financially Fit? 6 Ways to Tell—And What To Do If You Aren’t

Sinking fund categories can help you prepare for the future!

Having a few sinking funds categories can help you manage your finances and ensure you remain debt-free.

You can save your sinking funds in a high-yield savings account, a checking account, or whatever you prefer. The main thing is that you make the calculations in advance for how much things will cost and then save accordingly.

Depending on your needs and lifestyle, you can set up a sinking fund for just about any major expense that you can reasonably anticipate. Pet care, vacations, college funds, self-care, and gift-giving are just some items that might fall on your sinking funds list. 

To take this a step further, learn more about handling money with our articles about budgeting best practices and money mindset.

The post 21 Sinking Fund Categories to Consider In Your Budget appeared first on Clever Girl Finance.

Often, living on one income requires you to get creative with your budgeting and learn to prioritize your needs over your wants. However, it can also help you find joy in the simple (and free) things in life. Check out these 15 tips to help you live well on one income.

There are a lot of different people who can benefit from learning how to live on one income.

For example, you may be looking for financial advice for single ladies, or you may need ideas on how to survive financially as a single mom. Or perhaps you’re in a partnership where you made a conscious decision to have one parent stay at home to care for the children.

You may even be in a partnership where one of you is experiencing losing your job or difficulty finding employment.

No matter your lifestyle and no matter how many paychecks you bring home, you can find a way to live a happy, fulfilling life—without breaking the bank.

From practical budgeting best practices to money mindset shifts, here’s a look at how to live on one income.

15 Tips for success when living on one income

If you’re living off one income, you know how difficult it can be to pay the bills. But don’t worry, you’re not alone!

With these 15 practical steps, you can learn how to stretch your income.

1. Build a sustainable budget for your single income

When you have only one source of income, you need to be more intentional and strategic with your spending, as there may be less margin for error.

And it all starts with building a sustainable budget.

Here’s an overview of better budgeting when living off one income:

Calculate your average monthly income

First, add up your income over the past three months. Then, divide this number by three to get your average monthly income.

Calculate your average monthly spending

Similarly, you can figure out your average monthly spending with a quick equation. Just add up your spending over the past three months and then divide by three.

Get to know your monthly expenses

The first step in minimizing your monthly expenses is identifying your monthly expenses. After all, as the old saying goes, You don’t know what you don’t know!

Start learning your monthly expenses list by organizing your spending into different categories, like savings, fixed expenses (such as rent), and discretionary spending (such as nights out).

Compare your monthly spending to your income each month

The cold, hard numbers don’t lie. Once you’ve determined your average monthly income and your average monthly spending, you can see whether or not your current budget is working for you.

Pro tip: If your monthly spending is equal to or greater than your income, it’s likely time to reevaluate your monthly budget.

Adjust your budget as needed

Are you spending more than you’re making each month? Don’t get caught up in a spiral of shaming or blaming yourself.

Instead, take action to change your spending habits now.

You can start by learning more about how to navigate money spending problems. It’s also a good idea to create new habits for how to spend money wisely.

Remember that a sustainable budget for a one-income household looks a little different for everyone, so avoid the comparison game by focusing on what’s right for you and your income.

Track your budget every month

If it helps, you can consider your budget a living, breathing being. In other words, you want to keep track of your spending every month (or even every week) to ensure you stay on track with your spending and saving goals.

One way to help you keep track of your spending is by starting a spending journal where you record and reflect on every penny you spend. Building a budget can be challenging, but by staying positive and motivated, you can achieve your financial goals.

2. Cut back on expenses

Don’t beat yourself up if you’re spending more than you earn.

There are many ways to embrace extreme frugal living to spend less on expenses and stretch your dollars further.

For example, to cut back on expenses, you can:

• Cancel subscriptions you no longer use
• Shop store brands instead of name brands
• Eat out only once or twice a month
• Embrace couponing
• Suggest free activities when you hang out with friends, like going for a walk or having a movie night at home
• Negotiate with your phone, internet, and cable provider for a lower rate

With a little effort and some smart strategies, you can cut back on your expenses and make your single-income household budget work for you.

3. Build an emergency savings fund

Building an emergency fund is vital for achieving financial stability, especially when you have a single-income household.

Here’s a step-by-step guide on how to get started:

Set a savings goal

Creating a clear savings goal is the first step toward building a robust financial foundation. After all, it’s much easier to work towards a clearly defined goal than a rough idea.

Best practices for emergency funds suggest saving at least three to six months of living expenses.

So, to determine your savings goal, you can simply multiply your monthly expenses by three, four, five, or six. For example, if your monthly expenses are $3,000, your savings goal should be between $9,000 and $18,000.

It’s also a good idea to consider your lifestyle and job stability when calculating your goals.

For instance, if you have a stable, relatively secure job, then you may feel comfortable saving just three months’ worth of expenses. Conversely, if your income fluctuates month to month, you may choose to save up to six month’s worth of expenses for greater peace of mind.

Start small

To build your fund, begin by setting aside a modest amount of cash each paycheck or month. Remember that every little bit is important, even if it’s just $20 or $50.

By adding to your savings accounts slowly but surely, you can confidently grow your emergency fund over time. Plus, starting small allows you to ease into the process and adjust your budget as needed without feeling overwhelmed.

A good rule of thumb for saving is to follow the 10% rule, where you save 10% of your monthly income. Then, as you get more comfortable with saving, you can slowly increase the amount you set aside each month.

Make saving automatic

One of the easiest ways to grow your emergency fund stress-free is to make it automatic. Automating your savings means setting up automatic transfers to send money from your checking account to your fund every month, twice a month, or however often you want. The best part is that automatic transfers are completely hands-free, so you don’t have to worry about “forgetting” to save.

Importantly, by sending money to your savings whenever you receive paychecks, you’re establishing a habit of saving that can serve you for the rest of your life.

Keep your savings separate

Keeping your emergency fund completely separate from your regular savings or checking account is a crucial step in ensuring that the money is only used for emergencies.

By having a separate account, you’ll be less likely to use your emergency fund for non-emergencies, such as impulse purchases or vacations.

Additionally, having a separate account can help you track your progress toward your savings goal and make it simpler to manage your finances overall.

An emergency fund may also help reduce stress in emergency situations, as you’ll be able to protect your peace knowing you have a designated fund to rely on.

4. Factor in debt

Debt can be a burden, especially if you’re living on one income.

But with a solid plan and discipline, you can tackle your debt and take control of your finances.

The first step is to factor your debt payments into your budget. This means allocating money from your monthly income to pay at least your minimum payments—on time. Above all, make sure you prioritize your debt payments over non-essential expenses.

Another helpful strategy is to look for ways to reduce your debt.

Reducing debt could include learning how to negotiate credit card debt with creditors for lower interest rates or setting up a debt repayment plan, such as the debt snowball worksheet method.

It may be a long journey, but every payment brings you one step closer to financial freedom and that glorious, living debt free feeling.

To help you stay disciplined, motivated, and consistent in your debt repayment plan, check out these inspirational debt free quotes.

5. Maximize your income-earning potential

While it can certainly take time to navigate the job market and find ways to increase your income, remember that it’s not impossible.

Here are several tips to help you create multiple sources of income:

Invest in yourself

Learning how to invest in yourself by taking some courses or obtaining certifications is a great way to enhance your skills and increase your value as an employee.

By staying current with new technologies and industry trends, you will be better equipped to handle challenges and develop new ideas. An investment like this can lead to greater opportunities for career advancement and increased income.

Negotiate your salary

When starting a new job or during performance reviews, it’s important to negotiate your salary and benefits package to ensure that you are being fairly compensated for your skills and experience.

Be bold, and don’t be afraid to ask for a higher wage or additional benefits such as flexible working hours or increased vacation time.

Do your research and come prepared with specific examples of your contributions to the company. Remember, negotiating your salary is not just about earning more money but also about ensuring that you are being valued and respected for the work you do.

If you want to increase your income without changing your job, you can also learn how to ask for a raise.

Start a side hustle

Exploring different side hustles for women can be a smart way to earn more money and develop new skills outside of your full-time job.

Whether it’s freelancing in your area of expertise or starting a side business based on a passion or interest, these opportunities can provide additional income streams and potentially lead to new career opportunities.

However, be sure to carefully consider the time commitment of your potential side hustle before getting started. That way, you can make a plan to effectively balance your new project alongside your full-time job so you can avoid burnout.

Finally, it’s also important to ensure that any side hustle does not conflict with your employment contract or company policies.

Grow your professional network

Love it or hate it, networking is an important aspect of career development that involves making connections within your industry and building relationships with like-minded professionals.

By attending networking events and joining industry groups or associations, you can meet new people and learn about potential job opportunities or clients that may benefit your career growth. It’s important to be genuine in your interactions and show interest in others’ work to build trust and rapport.

If you can’t attend these groups or events in person, you can also find ways to network online if meeting in person isn’t possible.

To help you get started, check out these networking tips for a career boost.

6. Seek out free resources and services

There are plenty of resources and services out there that can help you save money and stretch your budget while living on one income.

One excellent option is to look for free community resources.

For example, consider heading to the library to check out books or magazines instead of paying for online subscriptions or going to the bookstore. You can also propose a clothes swap with friends instead of cashing out at the store.

And remember, for financial help, there are plenty of free online resources for budgeting, saving, and investing.

Another way to save money is to explore government programs that can assist with healthcare and housing.

However, be aware that some of these programs have income thresholds, so check if you’re eligible.

Finally, ask for help from friends and family if you need to. You’d be surprised how many people are willing to lend a hand or offer support during tough times.

7. Plan for unexpected expenses

Facing unexpected expenses is never fun—and it can feel even more stressful when you’re living off a single income.

The best thing you can do to help ease the burden of unexpected expenses is prepare, prepare, prepare!

Check your insurance

Sure, making regular insurance payments is never fun. But you’ll be happy if you have the right coverage in place in the event of an emergency!

To help safeguard yourself against financial emergencies, be sure you purchase the correct types of insurance coverage for your lifestyle, such as:

• Health
• Home
• Renter’s
• Car
• Life
• Pet

Take preventative measures

Remember: It’s almost always cheaper (and often easier) to maintain and care for your belongings than replace them.

For example, you can care for your car and help prevent future expensive repairs by regularly changing your oil. Similarly, you can help avoid expensive damage to your home by doing routine chores like cleaning your gutters.

These projects may not be fun, but they sure beat paying a hefty, unexpected bill!

Of course, surprise expenses are a part of life, but with some planning and preparation, you can minimize their impact on your budget.

8. Create a financial plan

If you’re trying to live on one income, having enough money can be a challenge sometimes. But creating a solid financial planning process and sticking to it can make a world of difference.

Start by setting clear financial goals, and then make a plan for how to achieve them.

Remember, it’s all about finding a balance that works for you and your family.

9. Prioritize needs over wants

If you really need to trim the fat from your monthly budget, it’s important to prioritize your needs vs wants.

Understandably, it can be tempting to splurge on things that make you happy at the moment, like ordering take-out or buying a new pair of shoes. But if you’re committed to long-term financial wellness, then you’ll likely need to take a more disciplined approach to your spending.

Take the time to evaluate your expenses and distinguish between what you truly need and what you simply want. Doing so will help you make more mindful spending decisions and prevent overspending.

And remember, it’s okay to treat yourself occasionally. (And there are plenty of budget-friendly ways to treat yourself, too!) Still, when it comes to budgeting and living on one income, needs should always come first.

10. Find affordable ways to enjoy leisure time

It’s easy to feel like you can’t do anything fun without breaking the bank, but that’s not true!

Truly, you can find many ways to save your pennies while still relaxing, having fun, and spending time with friends.

For example, you can go for a walk in the park, have a picnic with your family, or visit a local museum or art gallery. You can also look for free events or classes in your community or get creative with DIY projects at home.

The key is to prioritize self-care and socialization without sacrificing your financial goals.

Need some inspiration? Discover 40 fun things to do for free with friends.

11. Stay motivated and focused on financial goals

When you’re dutifully saving every month, making your debt payments, and staying away from fancy restaurants and expensive stores, it can be all too easy to lose your motivation to save.

To stay inspired and focused, it’s important to remember why you set financial goals for yourself in the first place. You may hear this referred to as “find your why.“

You can also check in with yourself regularly and reflect on how you feel about your financial situation by money journaling.

Above all, don’t be discouraged if you experience setbacks. We all overspend sometimes.

12. Communicate openly with your partner

If you are in a relationship where you share one income, it’s important to remember that you and your partner are a team.

And it may seem obvious, but it can’t be overstated: Communication is vital.

If you haven’t already, sit down with your partner and have a real talk about money. By openly discussing financial goals, concerns, and budgeting for couples, you can be sure you and your partner are on the same page so you can make informed decisions together.

13. Stay flexible and adjust your plan when needed

Life can be unpredictable. Sometimes, no matter how much you budget and plan, unexpected expenses still come your way. That’s why it’s crucial to stay flexible and be ready to adjust your budget and financial plans when needed.

For instance, your income may change, you may decide to start saving for a house, or you may be expecting a child and need to create a baby budget. Whatever the case may be, remember—your money is supposed to work for you, not against you.

That means your budget should change and evolve throughout your life as you do.

There are plenty of different budgeting methods you can try, so don’t be afraid of changing your financial plan as you grow.

14. Teach your kids to embrace frugal living

Trying to figure out how to live on one income is particularly challenging if you are also raising a family. But there are ways to stretch your family’s income with frugal living tips.

For example, to make your family’s income work for everyone (from you to your partner to your kids), you can organize budget-friendly family night ideas, look for ways to save with your back to school shopping list, and figure out some at home date night ideas for you and your partner.

This is also a great time to start teaching your kids about money so they can learn financial literacy from a young age.

15. Learn to meal prep

It may sound silly, but changing up your eating and cooking habits can go a long way in helping you save money.

For example, when you create a monthly meal planner, you’ll know exactly what you need at the grocery store weekly. This helps keep you focused so you don’t randomly fill up your cart with food items you don’t need.

Plus, learning budget meal planning just makes cooking easier. In turn, this translates to fewer nights where you call in expensive take-out because you don’t know what to cook for dinner.

Get started meal prepping right now by picking next week’s meals from this list of 25 of the cheapest meals.

Expert tip: Make it easier to live on one income by hitting unsubscribe

A tip like this won’t make you extra money—but it sure can help you save. First, unsubscribe from all subscriptions that you don’t use, even those $5 subscriptions that you don’t think are a big deal. After all, $5 every month adds up!

Next, head to your email inbox and unsubscribe from as many marketing emails as you can. The fewer advertisements, sales, and coupon codes you see, the less you’ll be tempted to click “Add to cart”.

Try it—you may be surprised by how much smaller your credit card bill is at the end of the month.

How can I afford a home on a single income?

To afford a home on a single income and to prepare for first-time home ownership, the preliminary steps include determining what you can afford, building your credit score and saving for a down payment. Importantly, you must also know what you can afford so you don’t end up house poor.

If you are living on one income, you can also research relevant government programs to help you more easily afford a home.

How can you afford life on one income?

Knowing how to afford life on one income can be challenging, so the best thing you can do is to learn to live frugally. In the future, you can also take steps to increase your income, for instance, by building passive income streams.

Remember to be aware of your budget and your financial goals at all times so you don’t spend unnecessarily.

Why is it hard to live on one income?

It is hard to live on one income because it basically means you have to support multiple people without getting multiple paychecks. This can be especially challenging if you have kids or lots of debt.

Whether you’re supporting just yourself, a partner, or an entire family, you can help ease the burden of living on one income by creating a budget that fits your lifestyle and cutting the budget if necessary.

Articles related to living on one income

If you enjoyed learning how to make the most of living life with one income, read these posts next:

• How To Plan Your Finances If You’re Getting Paid Monthly
• Budget Not Working? Here Are 5 Tips For Better Budgeting!
• 33 Creative Ways To Save Money Right Now
• Living Beyond Your Means? Here Are 10 Signs

Living on one income will require consistency and dedication, but you can do it!

Living off one income can be challenging, but it is achievable with careful planning, prioritization, and flexibility.

By taking these steps, you can reach financial stability, reduce stress, and focus on what truly matters. Don’t be afraid to seek resources and support along the way, and remember that small steps can lead to big changes.

The post 15 Key Tips For Living On One Income appeared first on Clever Girl Finance.

For many people, budgeting is just not any fun, and it means limits or lack of or even punishment. But if you choose the right budgeting method, you can be financially successful, and budgeting doesn’t have to be such a chore. Find out about the best budgeting methods so you can decide which one to use!

I personally prefer the word “plan” to the word “budget” because it doesn’t sound so constraining. But a budget broken out into budget categories in some form is really important for your financial success.

Ever heard the saying from Benjamin Franklin, “Failing to plan is like planning to fail”? Well, if you don’t plan, you can’t win and your budget is there to help you win.

That said, the process of budgeting doesn’t have to be difficult or complicated, either.

There are several advantages and disadvantages of budgeting, but it’s generally a positive thing. You just need to create a system that works for you. And this means the right budgeting method.

In this article, you’ll learn all about the various types of budgets and how to win with your money! But first, let’s discuss why understanding the different budgeting methods even matters.

Why it’s important to understand budget methods

There are some pretty solid reasons why you should understand and be using some or one of the methods of budgeting. It helps keep your spending in check, tracks your expenses, and teaches you to control your money — and not have it control you!

It’s also the first step in helping you build wealth.

Having a budget allows you to enjoy life without the stress of how to pay for it later. Because “later” rarely comes. Paying for things in the present instead of the future allows you to truly enjoy yourself and live the life you want.

I was able to save $100,000 in just 3 years by making a budget and sticking to it. And you can find out how to save 100K, too! Imagine what you can accomplish with a little planning.

People will often allow their emotions to cloud their judgment when it comes to planning their finances.

However, if you look at your money objectively for what it really is, a tool, then it’s easier to make your plans! Once you decide what your priorities are, the different budgeting methods you choose should reflect them.

4 Different budgeting methods to consider

The method you choose is entirely up to you; the most important part is picking a style that works for your life. Trust me, even if you currently hate budgeting and need a better budgeting system, there’s a style out there for you!

Finding what works for you is the most important step because not everyone’s brain processes information the same. You may like one of these methods or a hybrid of a couple of them. You may choose to start budgeting weekly or prefer a biweekly budget or monthly.

The most important thing is just to do it. If one doesn’t work, try different types of budgeting methods. That said, below are four different ideas that you can try.

1. Envelope or cash system

The cash-based budgeting system is simple. You subtract your expenses from your income and then put the amount of each expense into its own envelope. These envelopes are your categories.

Using cash may also make it easier to stick to your budget. Studies have shown that you spend less when using cash. But you don’t have to use cash for all of your bills when using the envelope system.

You can set up the money for your big bills using a digital envelope system. Then, track them through a budget worksheet or an app. Then, put actual cash for your smaller expenses or day-to-day transactions in actual physical envelopes.

The cash envelope system works best for categories which you can use cash for on a daily basis. So, things like clothes, food, eating out, fun, kids’ expenses, etc. Do not make it overly complicated, or it will be hard to follow and stick to.

Learn more about getting started with the cash envelope method. And be sure to check out our reviews of the best cash envelope wallet options.

2. Percentage breakouts

Another way to examine your budget is to break down your household income into percentages. Once you do this, you can organize your spending and savings accordingly where you allocate percentages to your:

• Needs
• Wants
• Savings and/or debt.

Keep in mind that the percentage allocations in your budget can change and that’s ok. Remember this is YOUR budget, and you can choose to spend less on one category to put more in another, like savings or debt repayment if needed.

So, for example, you can select a 35/30/35 breakout, a 35/35/30 breakout, or even a 25/25/50 breakout. The goal is to set percentage breakouts that make sense for you.

Just be mindful of how much of your income you spend on housing alone. A good rule of thumb is to keep your housing costs to less than 30% of your income.

Otherwise, you won’t be able to put as much money towards your other goals. Things like saving and investing or becoming debt-free.

It’s helpful to maintain a budget worksheet for this method, too. Using one of the best budget templates or a worksheet is helpful to see where your money is going. It can help you create your budget easily from month to month.

Here are some common percentage budgets you can try:

70-20-10 budget

The 70-20-10 budget method helps you break your income down as follows: 70% to your expenses, 20% for savings, and 10% to pay off debt (or for charitable donations).

Included in your expenses are essentials like groceries, personal care, and housing costs, but also non-essentials like gifts for weddings or fun money. Then you save 20% towards your goals, including your retirement investing. Last, you’ll pay off any credit card debt or personal loans and give to others with the remaining 10%.

50-30-20 budget

The 50-30-20 rule is fairly straightforward. You spend no more than 50% of your income toward your needs and essentials (things like housing expenses, rent payments, home repairs, transportation costs and car payments, your food budget and groceries, etc.) It also includes debt repayment.

Next, no more than 30% of your income goes toward wants and non-essentials (cable, entertainment, subscriptions, vacations, presents for an anniversary or birthday, etc.)

Finally, at least 20% of your income goes toward savings (your retirement account, emergency fund or rainy day fund, health savings account, saving for college tuition, etc.)

It’s one of the easiest methods of budgeting because it works for a variety of incomes and allows you to save and spend freely.

60-30-10 budget

The 60-30-10 rule is a very unique budgeting method. It works best if you have either a very high income, low expenses, or both. 

With this approach, 60% of your money goes toward savings, debt payoff, and investments. Then, 30% is budgeted for your essential costs, like your mortgage, renters insurance, property taxes, school supplies, food, etc. Last, 10% is left over for whatever you want to purchase, like birthday gifts for friends, dinners out at restaurants, etc.

Even if you can’t use the 60-30-10 budget yet, you can always use a percentage method that allows you to save more. Maybe try for 30 or 40% savings to start, and work up to saving more over time.

80-20 budget

The 80-20 budget is a simple approach that can be very effective. 20% of your money is for your savings goals. The other 80% is for your essentials and discretionary spending. 

So you would budget 20% of your wages towards your emergency fund, investing, and other goals. Meanwhile, you divide the rest for your expenses and anything else you want or need to buy.

For example, essentials like rent, homeowners insurance, groceries, life insurance, internet, etc., are paid for from the 80%, as well as discretionary spending like Netflix and movies, tickets for events like a concert, or gifts for birthdays.

30-30-30-10 budget

Another common percentage is the 30-30-30-10 budget. It’s a method that makes a lot of sense if you want to be careful about how much money you spend in important categories.

With this approach, you spend 30% on your housing costs. Another 30% goes towards your savings goals, like retirement and paying off any debt you have.

In addition, another 30% pays for your other essential expenses like internet and groceries. Last, the final 10% is for discretionary spending.

A budget like this means you’ll be careful that your housing costs don’t get too high, which can be helpful, and you’ll save a significant amount.

3. The reverse budgeting approach

As the name implies, reverse budgeting is the opposite of most methods. With most budgets, you subtract your expenses from your monthly income, but the reverse budget is different. It is also known as the “pay yourself first” method.

In this method of budgeting, you focus on savings and financial goals, such as saving a certain amount of money each month, in addition to paying your essential bills, like mortgage payments and utilities.

Then, as long as you meet your monthly goals and pay your bills without exceeding your income, you can do what you like with the money leftover. Reverse budgeting can be one of the best types of budgeting methods because it’s easy, and you don’t have to overthink your money goals too much.

4. Zero-based budgeting

Another form of a budget is the zero-based budgeting example. Zero-based budgeting is the method that Dave Ramsey advocates using. Basically, a zero-based budget is planning for every single dollar in your budget.

So, instead of having $X amount left over at the end of the month, you have $0 left (on paper anyway). When you are planning out your budget, you account for everything you can think of in the budget so that every dollar has a purpose.

You won’t really have zero dollars at the end of the month because you have accounted for different savings funds in the budget. The method is effective because it creates intentionality with every dollar so that what is “left” doesn’t disappear every month.

So no matter what you spend your money on, from essentials like health insurance and debt payments to discretionary spending like going to a concert or money for a hobby, you plan it in advance with the exact amount of money you need.

Budgeting using a spreadsheet vs. an app: Which is best?

Some people love an organized chart for their money — they don’t have to worry about bank security or what’s happening with their personal information. And using a budget spreadsheet allows them to get really close to their numbers.

Do you like this approach but are worried about being able to access it when you’re not home? Google Drive is free and makes it easy for you to upload your budget worksheet for easy access on your mobile devices.

Apps, on the other hand, can make it really simple to budget, especially if you can connect your bank accounts to them so your transactions can be tracked automatically. These days, most apps have extra levels of security.

But sometimes, there can be delays in transaction updates. And apps are not always as intuitive when it comes to categorizing transactions, which will require you to spend some time setting things up.

That aside, for the most part, all you’ll really need to do once things are set up is check in frequently. It will help you ensure your transactions are tracked correctly. You can also set up alerts to keep you on top of your budget.

Whether you choose a budget worksheet or an app, you can set up your budget to be reflective of any of the above methods. Be sure to check out our example of a budget.

6 Tips for succeeding with your chosen budgeting method

Budgeting doesn’t have to be scary and overwhelming. Once you get the hang of doing it, it gets easier and easier every month to have organized finances. Following these simple steps will help you streamline the process and actually stick to your budget.

1. Call it something fun

Call your budget something that you like and that motivates you to keep up with it. Who says it has to be called a budget?

Give it a nickname and a personality. The word budget is boring anyway!

2. Create a budget in advance of each month

Creating a budget in advance of each month means you kick off the next month with a plan, and you aren’t scrambling to figure out what to do. After all, new month new goals, right?

Plan to create your budget a few days before the month starts. You’ll have time to lay things out and figure out what your finances will look like in the upcoming month.

Once you get in the habit of creating a budget, you will even be able to plan out your budget for several months at a time.

3. Don’t assume every month will be the same

Every single month should be planned for separately. No two months will be exactly the same financially, so you want to prepare in advance for things like one-time bills or expenses, travel plans, events, etc. So, creating a new budget specific for each month is essential.

Similarly, budgeting for life-changing events requires extra attention and a budget review. Whether it’s a new baby or you’ve paid off debt, sometimes you need to take a hard look at your monthly budget and accommodate those changes as needed.

4. Create your budget based on your projected income for that month

If you get paid one time a month, twice a month, or every two weeks, base your budget on that projected income so you know exactly how much you have to budget.

Remember that if you get paid every two weeks, there will be a month when you get three paychecks. So plan accordingly.

On the other hand, if you’re budgeting with an irregular income, you may have some challenges getting it right at first. You’ll have to be even more diligent with tracking your spending and estimating your income, but it can be done!

5. Pay your expenses before splurging

Paying expenses first means paying for your essentials, debt, and goals (savings and investments) first before you do any splurging or miscellaneous spending.

The last thing you want is to find that you have overspent on what isn’t necessary and don’t have a way to pay your bills.

However, that being said, it’s okay to splurge and have some fun money. Just make sure you are building your splurges into your budget so you can enjoy them guilt-free.

6. Track your transactions

Tracking your transactions allows you to make sure you stay within your budget and keeps you conscious of your spending habits. You can track your transactions in a spending journal, spreadsheet, or with an automated app or online tool.

If you are just getting the hang of budgeting, it’s a good idea to track your transactions and check in with your budget every day. It will only take a few minutes, and it will help you stay on top of your finances. Plus, you’ll be building up one of the essential money habits of checking in on your finances frequently.

Expert tip: Budgets can change your life for the better

Budgeting may not seem like a lot of fun, but if you find the right method, it can really help your financial wellness. If it seems difficult, try out another method until you create a system that makes sense for you.

And remember that you aren’t budgeting for no reason, you are doing it so you can build a better future for yourself.

Budgeting ensures you can pay bills, pay off debt, and invest money. Remind yourself of how budgeting helps you if you feel like quitting, and don’t give up!

What are the most common budgeting methods?

The cash envelope system, percentage budgets (e.g., the 50/30/20), reverse budgets, and zero-based budgets are some of the most common budgeting methods. They are all different from each other. So the chances are you’ll find one that is right for your lifestyle, and it’s important to find one that works for you.

However, if you don’t want to keep searching for another method, you can create a hybrid of different budgeting methods to come up your own unique budget!

Which budgeting method should I try first?

If you want to know which budgeting method to try first, try out a percentage one like the 50-30-20 rule. It will give you a good starting place with your finances. Then, you can change the percentages as needed depending on your lifestyle and goals.

Keep in mind that there are several other budgeting methods you can try out, too. For example, the reverse budget or the zero-base budgeting method.

What are 5 budgeting methods?

5 budgeting methods that are likely to work for most people are the 50-30-20 budget, reverse budgeting, the 70-20-10 budget, zero-based budgeting, and the envelope system. While there are other types of budgeting methods, these five are likely to be easy to implement for the majority of incomes.

There are plenty of ways to plan your money to make the most of it. As long as you use a method that allows you to pay your expenses and save for the future, you can’t go wrong.

Articles related to budgeting methods

The best types of budget are the ones that work for you! If you enjoyed this article, check out these other great articles on budgeting methods.

• How To Use Use Budget Categories
• How Does The 30-30-30-10 Budget Work?
• Budget Not Working? Here Are 5 Tips For Better Budgeting!
• 10% Rule: Is Saving 10% Enough?
• How To Use The Cash Envelope System To Master Your Budget

Leverage these methods of budgeting today!

The budgeting method you choose can help you succeed financially. If you slip, brush yourself off and get back on track. Take the lessons you learned about budgeting from the previous month and apply them to the next.

If you find that the method you want to use isn’t working, you can adjust it to suit your preference or try an entirely new method. No matter what, keep trying until you find the right way to budget your money and reach your financial goals.

The post How To Budget: The 4 Best Budgeting Methods To Try! appeared first on Clever Girl Finance.

Love it or hate it, if you want to be financially successful, you need to budget your money and success with budgeting means understanding budget categories. Knowing about the different kinds of things you might spend money on can help you figure out which ones apply to you and your financial situation. So, let’s talk about the various categories that you might need, including a budget categories list!

Sometimes, the easiest way to decide on budget categories for yourself is to see a big list and then choose the ones that apply to you. You may not need every category, and that’s okay. It’s all about which items you need to include in your personal budget.

4 Main budget categories and sub-category lists

Below is a list of 4 main expense categories for a budget as well as a list of sub categories for each one. I also elaborate on the importance of each category and how to clearly layout your sub categories:

1. Finances for your future self

Your financial future is affected by what you do now. And so it’s important to have a category in your budget that caters to our future self. This group of categories includes:

• Retirement account contributions e.g. 401k/403b/IRA
• Non-retirement investing (e.g. index fund investing)
• Health savings account (HSA)
• Emergency fund
• Credit card payoff
• Student loan payoff
• Other loan payoff

Why having a plan for your future self is important

Ever heard the words “pay yourself first“? It should be a consistent part of any plan you make. Because of this, the “finances for your future self” category is all about thinking ahead.

But what does pay yourself first mean? Before you pay any bills or do any shopping, a portion of your earnings should be diverted into your retirement account, if possible, for your future self and your emergency savings accounts for a rainy day.

Time goes by so quickly, and planning for the future version of you will ensure that you can enjoy your retirement and not have to depend on the government or your children to take care of you. 40% of elderly Americans are dependent on social security during retirement, according to the National Institute on Retirement Security, so it’s important to save for the future now.

Having an emergency fund, or even a rainy day fund, will also provide you with a buffer in the event of an unexpected cost so that you can rely on your emergency savings instead of a credit card or other debt.

Almost 50% of Americans want to focus on saving for emergencies, according to Nerd Wallet. So it’s incredibly important to add this to your budget in case anything unexpected comes up that you need to pay for.

Also included in this group of categories is the money to pay off any debt you have (e.g., your credit card debt, car loan, personal loans, student loans, etc.) because it is essential that you pay off your debt as soon as you can so you can focus on building wealth. It may not seem this way, but debt payoff is actually future-focused because it will offer you more security and money later.

2. Essentials

Your essentials are items that can’t be taken out of your budget or put off for a later time. They are things you need to pay for in order to have a good quality of life, so they should be one of the first things on your budget categories list. Your essentials category would include:

• Mortgage payments or rent
• Utilities (e.g water, electricity, internet)
• Groceries and food budget
• Transportation costs and/or car payments
• Renters insurance
• Homeowners insurance
• Property taxes
• Health insurance
• Auto insurance
• Life insurance (e.g. Term or Whole life insurance)
• Disability insurance
• Dental care
• Childcare costs
• Pet food
• Necessary personal care items

Getting really clear on what your essentials are

As mentioned, your essential are the things you need to live your life. However, this category does not include money for shopping or getting your nails done — those are not essentials.

Instead, essentials focus on the categories that you need to get by. Meaning your basics such as rent money and any housing cost categories, transportation, insurance, and food.

Your essentials are your non-negotiable costs, and they should be one of the first things you take care of when you get a paycheck.

3. Life goals

Your life goals include things like saving for the future outside of retirement and other things that you may want to pay for to enhance your life.

Although not as essential as a car payment or groceries, “life goals” is a really important expense categories to have in your budget.

• Tuition savings for a child’s college education
• Certifications or training to help with your career aspirations
• Savings to start a business
• Savings to move to a new city or country
• Home down payment
• Home repairs and projects
• Donations to charities you believe in

Defining your life goals

Your life goals might include things like your midterm savings and investments for the next 10 to 15 years, business savings, saving for a home purchase, saving money for college, and so on.

I recommend creating separate accounts to save for each of your different life goals. I personally have automated deposits set up for different goals, and it’s helped me stay on top of my savings!

4. Everything else

Anything that isn’t essential and isn’t saving for a specific goal is considered unnecessary. But this category is usually the most fun, and it makes life more enjoyable!

• Entertainment e.g. concert tickets, movies, etc.
• Gym membership
• Eating out e.g. fast food, coffee shops, and restaurants
• Vacations
• Gifts e.g. for extended family and friends, weddings, anniversaries, or birthdays
• Cable subscriptions or cable alternatives
• Streaming services e.g. Netflix, Hulu, Amazon Prime
• Hobbies e.g. gardening, crafting
• Self care e.g. getting your nails done, going to the spa for a massage, etc.

Everything else should include fun money

The “everything else” category is your splurge money. It’s the money you would spend shopping or saving for a wish list item, traveling, entertaining yourself, and whatever else it is that you would typically do as a part of enjoying the life you have.

Having a category like this matters because you want to be able to enjoy your money sometimes, even as you pay your bills and work towards your goals. So it can boost your morale and allow you to reward yourself for working hard.

You might include things like going to the movies, dinners out, birthday gifts for friends, and other items in this category.

Using percentages for your budget categories

Once you are clear on your list of budget categories and sub-categories. It’s a good ideas to assign each category a percentage. You likely won’t be spending the same amount on each category. Some categories will require more of your income than others.

However, knowing approximately what percent of your income should be assigned to each category is a big part of organized finances and can help you with improving your spending habits.

For each of the 4 main categories mentioned above, below is a general guideline of how your money can be allocated. However, based on your individual expenses and goals, the percentages may look a bit different for you.

• Finances for your future self: At least 20%
• Essentials: 50%
• Life goals: 15%
• Everything else: 15%

Keep in mind that you can adjust these budget category percentages according to your goals and timelines. Remember, your budget is your blueprint for how to manage your money so you can build wealth, and it should work well for you personally. Be sure to check out our example of a budget.

Expert tip: It’s ok if your budget categories change

Choosing budget categories is not a one-time process. Budgets are ever-evolving and might need to change to meet your current needs.

Although you will probably always need to include the four main budgeting categories, you may find that you may need to adjust or change the sub-categories.

So make it a habit to continue to check in with your expenses, goals, and list of budget categories to make sure your spending reflects them.

How do you plan your budget categories if you are focused on paying off debt?

If you are focused on paying off debt, you should plan to pay as much as you can towards your debt each month rather than the minimum payment. And so paying off debt might mean lowering the amounts you contribute to your different budget categories.

For example, you might need to spend less on things like entertainment or vacations and instead reallocate the difference to paying off your debt as fast as possible.

Like with everything money-related, sticking to your plan requires discipline. If you struggle with your plan initially, having an accountability partner is a great idea!

Reach out to a friend for support. We all need a cheerleader sometimes.

How many categories should I have for a budget?

The number of categories you choose for your budget depends on your expenses, goals, and splurges. That said, it’s a good idea to have categories for:

• Long-term savings goals for your future self and debt repayment
• Your essentials and needs
• Other life goals,
• Non-essentials like travel, splurges or fun money

You can then break these main categories into smaller sub-categories. Although there is no perfect number of categories, it’s a good idea to start with these four main categories at the very least.

What are the four main categories in a budget?

The four main category groups in a budget are finances for your future self, essentials, life goals, and everything else. You may choose to call each of them by different names e.g. “retirement and savings,” or “discretionary spending” but the main idea for each category is the same.

You will likely need all four of these categories to create a balanced budget, though your sub-categories under each of the main categories you choose will vary depending on your expenses and even your goals and lifestyle. For instance under your main category, “Finances for your future self” you might have sub-categories for your 401k/IRA, emergency savings, and student loans payoff.

Articles related to budgeting

If you liked this article about budgeting with budget categories, check out these other great articles:

• 20 Cash Envelope Categories For Your Cash Budget
• The 50-30-20 Rule: How It Works + A 50 30 20 Budget Template
• How Does The 30-30-30-10 Budget Work?
• How To Create A Family Budget That Works For Your Family

Leverage these expense categories in your budget today!

Like any art, budgeting takes time to master. Additionally, part of budgeting well is defining your budget categories. Knowing what category something belongs in can help you decide if you save for it or purchase it now or later.

Budgeting can be difficult, but categories can help! If you need hands-on budget counseling, that’s okay, too. The most important thing is to start and just keep going even when it gets tough, knowing that making a plan is going to help your finances.

The post How To Use Budget Categories appeared first on Clever Girl Finance.

Whether you’re working for yourself or have an irregular job schedule, budgeting on an irregular income can be tough. You still have to pay your bills, but you aren’t always sure how much money you’ll have. But creating a budget for this type of income is easy to learn!

Perhaps you would like someone to describe irregular income and give examples. According to American Progress, there are millions of Americans who are self-employed. If this is you, or you work as a freelancer or a contractor, your income is dependent on how much work you do, which makes your income irregular.

And sometimes the work you’re doing now won’t pay for another 30 to 45 days!

If you work in the service industry or another hourly job with a rotating schedule, your hours and income can vary from week to week.

Similarly, if you have a sales job where you earn a commission, it can be hard to determine what your actual income will look like at the end of each month. Entrepreneurs and people who work in the gig economy may also face irregular income challenges.

So how do you budget when you don’t have steady paychecks? It may seem that budgeting with a fluctuating income is impossible. But there is a way to best approach your finances that will allow you to be successful with managing your money and give you peace of mind.

Budgeting when you have an irregular income

A budget is a plan for your money. When you have a predictable monthly income, creating a budget with budget categories that work for you is a little more straightforward (though it still has its challenges).

When your income varies, making a plan for your money can be more work, but it can be done. Here are five tips to help you create a successful budget on an income that changes.

1. Create your baseline budget

You can also call this your bare bones budget. The total amount of these expenses is the minimum amount of money you’d need to earn each month.

The expenses include necessities like your rent/mortgage payment, utilities, food, and car payment. It does not include going out to eat, shopping, or entertainment — remember, it’s the bare minimum amount of money that you need to get by.

For some of these, you’ll know exactly how much you’ll be spending every month (e.g., rent/mortgage). For others, you may have to do some digging to figure out how much you should expect to spend.

By doing this, you’ll be able to determine how much you need to have coming in at the very minimum. Additionally, if you earn more than your baseline expenses you can put the extra money aside for any lower income months you might experience.

Budgeting tools and strategies

You can use a number of the best budget templates and tools to categorize past expenses and determine how much you’re spending every month.

Additionally, you can use expense tracker apps to figure out how much you’ve been spending. Then you can use those numbers in your baseline budget for the current month. But you can also use a simple spreadsheet or a spending journal that helps you keep track of your money.

Once you know how much you’re spending, put all the information into a monthly budgeting strategy that lists all your necessities and their costs. Add up the total, and you have the amount you need to get by each month.

You may choose a budgeting app or simply write your budget down. Just make sure you know your numbers and you choose a method that works well for you.

Pro tip: A calendar can also be very helpful to remind you when specific bills need to be paid.

2. Prioritize your essential and non-essential expenses

Your expenses need to be listed in order of importance so you know what to pay first. For instance:

Essential spending

All of your essential expenses should come first with an irregular income, but you can prioritize them. Prioritizing means determining what bills need to be paid first, second, third, etc.

For instance, housing, food, and transportation could be items 1, 2, and 3 on your list. Having this priority in place ensures that you are properly allocating your money to your top budget items first when you get your paycheck. 

It’s also important to note that your emergency fund and any other savings are essentials that should also be taken care of before discretionary spending.

Discretionary spending

Once you create your baseline budget with your necessary expenses, you can add to the list your non-essential expenses or discretionary spending. Things like eating at restaurants, going to the movies, and gym memberships are considered non-essential spending habits.

Prioritize your discretionary spending in order of importance for times when you have extra cash.

Doing this may involve making some difficult decisions and cutting things that you can’t currently afford to avoid overspending.

For instance, going out to eat or that Netflix subscription. While you’re figuring out your budget, it’s important to remain focused on your goals and learn how to stop spending money on non-necessities.

3. Save for future months during the months you earn more

Having an irregular income means you’ll have good and not-so-good months. You can hope that your income will increase over time, but that’s not always the case. Lots of things, like seasons, can factor into how much you’ll be making.

Have a specific account to draw money from when needed

If you happen to earn excess money in a certain month, pay for your most important expenses first (as discussed above). This includes all your necessary expenses and saving goals.

Then, whenever you have a month that you make more money, add some extra funds to a separate account.

These savings will help you in future months in the event that your income declines again. Or if you have unplanned life circumstances that require you to spend a lot of money at once. Saving can help you cover your expenses during those months without having to leverage credit cards, leading to debt stress.

Sinking funds

It’s also a good idea to establish sinking funds. A fund like this is specifically for large upcoming expenses that you know you’ll need to pay for.

You should contribute to this as often as possible. That way, you will have the money you need when the time comes to pay annual expenses or one-time costs.

To find out how much to save, consider all of your upcoming expenses. Both those that are recurring and those that will only happen once.

You can add up the cost of all of them and then divide that amount by several months or divide it up through the whole year.

4. Earn extra income

If you find that your earned income doesn’t pay for as much as you would like it to, there is another option: earn more!

Ideally, your irregular income provides for your living expenses. But if you want more discretionary or saving money, try some of these ideas:

Side hustle

You might try starting your own business or easy side hustles in order to earn more. It can be something that you do in addition to your full-time job that doesn’t take up too much time. The great thing about this is you can potentially earn as much as you want!

A side hustle could be walking dogs, cleaning houses, taking on freelance writing jobs, etc. Anything that you have the talent or time to do.

Second job

Side hustles don’t work for everyone. So you can always take on a part-time job in addition to your regular one. Work weekends, evenings, or whatever schedule works for you.

You may be able to take on a job where you’re already familiar with the work, or you can branch out and try something entirely new.

But is working two jobs worth it? Make sure you have the time for this before taking on another job.

5. Define your money goals

Even though your income varies, it doesn’t mean that you shouldn’t plan for the future! Come up with a couple of money goals, then consider how much you want to save.

Even if it takes a while, getting started with your goals will help you to build momentum and know that you are moving in a positive direction with your money. 

Including saving for your goals before discretionary spending in your budget is also a good way to make sure that you make progress.

Here are some examples:

Prepare for retirement

There are quite a few ways to do this, from a 401k if you have the option to IRAs or regular investing. While retirement planning can seem overwhelming, it’s actually not too difficult to get started.

Try using a retirement calculator to find out how much you should save each month and year, and then start contributing now!

Plan your vacations

Just because you have an income that varies doesn’t mean there’s no room in the budget for fun! If you love to travel, start planning a vacation to somewhere you’ve always wanted to go.

Be sure to total up the cost of the trip in a vacation budget and then set aside money with each paycheck or whenever possible.

Save up for education

If you are saving for your kid’s college education, or you plan to go back to school yourself, start saving up money and learn how to avoid student loans.

You may also wish to save for a professional goal. For instance, taking classes or gaining certifications in your career, may cost money and/or time.

Determine what time frame you’re working with (how many years until you need to use the money), as well as the full cost of the education. Then you can make a plan for your savings.

Expert tip: Determine how best to manage your irregular income

Although some people can work easily with an irregular income and don’t struggle with the paycheck uncertainty, you may find that it isn’t for you. If you find that even with a budget you feel concerned about your finances, it may be time to look for alternative solutions.

While having a varying income is completely fine, it’s totally okay to change this if you would feel more financially secure with a more stable amount of money each month. Look for a career that will allow for a steady paycheck, and continue with your budget and financial goals.

What is an irregular income with an example?

An irregular income is simply one that doesn’t pay the same every paycheck.

For instance, you might make $3,000 one month and $5,000 the next.

An income like this means that you will need to be diligent about budgeting and saving up your money for lower income months, or you may feel like you’re living paycheck to paycheck.

What is an example of an irregular income job?

An example of a varying income job is one that has varying hours, such as working in a restaurant that is much busier in the summer than in the winter. There may be times when there is more work to do and others when there is less.

Another example is if you have a job that takes on various projects, such as a freelance writer. If you are paid per project, your income can change quite a bit from one month to the next.

Can you budget with an irregular income?

Yes, you can budget with an irregular income. You simply have to prioritize and stay organized. It’s also very important that you create your baseline budget by factoring the minimum amount you need to spend on bills and also by using an average of your past income e.g. An average of how much you earned over the last 6 months.

By budgeting based on your minimum expenses and average income you can put away any earnings over your average income to accomodate for any low income months in the future.

Be sure to pay your essentials first, then your savings goals, and then consider spending on non-essentials. Following this method will help you to pay your bills without worry.

Articles related to an income that is irregular

If you found this article about a varying income helpful, check out these other posts next!

• Zero Based Budgeting 101 + The Best Zero Based Budget Templates
• Budget Not Working? Here Are 5 Tips For Better Budgeting!
• 31 Ways How To Make Money Without A Job
• Budgeting For Couples: How To Budget As A Couple

You can budget successfully on an irregular income!

Putting a plan in place, regardless of your income, is the foundation of financial success in life. It’s all about managing your monthly expenses, whether there are fluctuations in your income or not.

Plan to revise your budget every single month, and if you fall short, each new month is an opportunity for better budgeting. Remember, you can be successful with your budget, create goals, and plan for the future!

The post Budgeting With An Irregular Income: 5 Success Tips appeared first on Clever Girl Finance.

Like many, you might shudder at the word budget, or perhaps it sounds too boring or challenging to figure out. But the 50-30-20 rule and the 50 30 20 budget template prove it doesn’t have to be difficult. If you’re looking to simplify your budgeting process or are new to budgeting, then this might be the perfect match!

Using budgeting best practices means planning out exactly how you’ll use your money, and this can be tailored to suit your specific lifestyle and situation with the 50-30-20 rule. This particular budget involves three easy steps that will help you prioritize your monthly financial commitments.

The 50-30-20 rule is comprehensive and covers all bases. And don’t worry if math isn’t your thing because we’ve included 50 30 20 budget spreadsheet ideas to help you stay on top of your budgeting strategies.

That said, let’s take a close look at this budgeting rule, including what it is and how it works.

In addition, we’ll include calculators so you can jump right in and get started immediately.

What is the 50-30-20 budget?

In its simplest form, the 50-30-20 budget rule divides your after-tax income into three distinct buckets, which are:

• 50% to needs

• 30% to wants

• 20% to savings

A plan like this helps simplify finances and is also easy to follow.

Who invented the 50-30-20 budget?

U.S. Senator, Elizabeth Warren, came up with the 50-30-20 budget. In a book called All Your Worth: The Ultimate Lifetime Money Plan, Elizabeth Warren and Amelia Warren Tyagi described this simple way to budget.

And not surprisingly, it has stuck. People love how easy it is to understand and follow!

Why this rule works

You might be wondering why this budget works and how it will impact your life and financial plan. There are a few reasons it can be great for your finances.

Simplicity

Firstly, the budget is really simple. So if you’re not into details or if you’re just starting out, this budget is fail-safe and easy to implement.

You only focus on three buckets – needs, wants, and savings which are pretty easy to figure out.

Every dollar has a purpose

Secondly, it helps you account for every dollar.

You start off with your after-tax income, which represents 100% of what you have to work with, and then you work out the different spending groups from there.

Financial goals

Lastly, the 50-30-20 rule can help you stay focused on your financial goals and save up for large expenses such as a house or car.

Alternatively, it can also help you create a debt reduction strategy if that’s one of your initial goals.

Percentages for your budget

The 50-30-20 budget is divided into three parts. 50% for needs, 30% for wants, and also 20% for savings. And remember, you can always use a 50 30 20 calculator or even a 50 30 20 budget template to create yours.

Category 1: 50% needs

The 50% needs category is for all your monthly essentials. Essentials include things you simply cannot live without.

For instance, rent or mortgage payments, healthcare, groceries, car expenses and payments, utilities, and also debt payments.

So as you can see, when budgeting for needs, you only include the necessities you need to survive. It would not include entertainment, take-out, or fine dining.

How to save to stay within the 50% rule

You should be able to comfortably meet your needs with 50% of your monthly income after tax. If you’re spending more than this, you may want to re-evaluate.

Are you paying too much for rent? Are you spending more on transport than you can afford?

Do you spend a large chunk of money on weekday lunches? These are all good questions to ask yourself.

Whatever the case, you can make immediate changes to your spending and also improve your budget with the 50-30-20 rule.

For instance, consider moving to a more affordable home or using public transport to keep costs down. Additionally, you can use cold lunch ideas and make your food at home to bring to the office.

Category 2: 30% wants

Wants are all the “nice to haves” that you spend money on with the 50-30-20 budget. These are items you definitely don’t need, but perhaps they are fun, or they add to your life in a positive way. And that’s OK!

The aim is to keep a detailed budgeting plan so your spending habits and fun money don’t get out of control!

The list of wants is endless and also differs from person to person, depending on your lifestyle.

For example, your personal list might include going out to the movies, eating in restaurants, buying new electronic gadgets, buying a pre-owned designer handbag, or tickets to a big game.

Another person’s wants might include cable TV or a Netflix subscription, going to concerts, and paying for gym memberships.

Consider alternatives to large expenses

Remember: there are many good substitutes for wants that cost little to nothing.

For example, you might want to buy the latest iPhone but can’t afford it. Instead, buy an earlier version, and you’ll still get the same benefits.

Alternatively, fitness fanatics who can’t justify the cost of signing up for the gym could work out at home instead.

There is almost always a cheaper alternative available when you’re looking to purchase an item. But feel free to balance your needs vs wants so you still enjoy some of these activities from time to time.

Wants may sometimes include premium experiences that are beyond reach financially. Decide what you can afford using the 50-30-20 rule.

For example, someone may want a new BMW when they can easily have a nicely equipped Toyota that would cost much less.

Be mindful of your wants, as it can be easy to justify spending if you really want something. This idea is tricky to master.

Category 3: 20% savings

Arguably the most important category in the 50-30-20 budget is savings, as this can determine your future. Savings, in this case, refers to both savings and investments.

Savings can take many forms ranging from your emergency cash to your savings account. It can also include any money market investments you have.

Keep in mind that investments refer to any money you have set aside to generate income. It can include investing in the stock market, purchasing real estate, or setting up your retirement accounts.

Priorities for saving

Your top priority should be your emergency fund. It is important to have 3 to 6 months’ worth of living expenses saved in your emergency fund.

Beyond that, focus on your retirement savings. These can include putting money into your company-sponsored 401(K) plan or an IRA. You might ask yourself, “Do I need a financial advisor?” and you can consider hiring one to help you set this up.

How to use the 50-30-20 rule to create your budget

The 50-30-20 budget rule is very simple, and it only has a couple of steps to get started. Here are some tips to make sure the budget works well for you.

Know what your income is

To get started, you need to figure out your after-tax income.

After-tax income is simply the amount of money you have left over after taxes are paid. These taxes include federal and state, in addition to Medicare costs, and don’t forget about social security.

Note: Don’t be confused by your gross income, which is the salary you earn before tax deductions have come out. We’re looking purely at how much money you have left in your bank account to divide it into your three main categories.

If you want a quick and easy way to figure out your take-home pay, simply look at your paycheck stubs.

If you run your own business or are starting a side business, you’ll still calculate your after-tax income. All you have to do is take your gross income and subtract your business expenses and also any state and federal taxes.

Split your income into the three categories

Once you’ve figured out your after-tax income, the fun begins. It’s time to split your income into the three spending groups.

You can do this by creating your own budget or by using the 50 30 20 budget template.

And then you’re all set! All you have to do is keep track of your money and also make sure you stick to the budget.

A quick note on paying down debt

Do you have credit card debt, a personal loan balance, or perhaps student loans to pay back? Debt payments fall across both your needs and your savings categories with the 50-30-20 rule.

Why? The minimum payment you owe on your outstanding debt is a need in that you must pay it back and also pay it on time each month.

But only paying back the minimum amount is a slow and expensive way to tackle your debt.

Instead, we recommend contributing to your savings so you save money to pay off your debt faster and start living debt free.

The saved money can go towards the principal, effectively saving you money in paying future interest payments down the road.

Expert tip: Customize your percentages

While it’s important to stay close to the percentages of the 50-30-20 rule, it doesn’t have to be exact for it to work.

For example, if you actually spend 53% of what you make on necessities, this budget will still work relatively well for you.

On the other hand, if you find that your percentages are very different, you may want to consider another percentage budget that will work better for your income and lifestyle.

Examples include the 80/20 budget, the 60 20 20 rule, the 70-20-10 budget, and the 30-30-30-10 budget!

A 50 30 20 budget template you can use

If you haven’t already set up your budget, this 50 30 20 budget template is easy to use. Simply add your own budgeting amounts.

Below is an example with possible amounts included.

Total net income per month: $5000

As you can see, you can add whatever amounts you want to this 50 30 20 budget template and then use the percentages listed to create your own version of this budget.

You can also add different budget categories if needed, but this works well as an example.

Additionally, here is an actual budget worksheet to download. You can lay it out based on the 50-30-20 split discussed. Just click the image below!

DIY 50 30 20 budget spreadsheet

Another option is to set up your own 50 30 20 budget spreadsheet.

If you’re great with Excel or Google Sheets, you’ll enter your post-tax income into a single cell and set up calculations to convert this into corresponding 50%, 30%, and 20% categories.

50 30 20 calculators

Figuring out your budget doesn’t have to be difficult.

Here are some examples of a 50 30 20 calculator.

Banzai calculator

The Banzai calculator will ask you to enter your post-tax income, and it does the rest for you!

You’ll easily see how much to allocate to each of the three categories for the 50-30-20 budget.

Credit Karma’s budget calculator

This option from Credit Karma is also helpful. It doesn’t calculate percentages, but rather, offers an overall picture of your budget.

Simply enter your income, along with your living expenses, other costs, etc. You will be able to easily see how much you have leftover each month and your amounts for spending, investing, and more.

Money Fit calculator

The Money Fit 50/30/20 budget tool is also a great resource.

It includes category ideas to help you see what you spend money on, and you can change the percentages to suit your needs.

Does the 50-30-20 rule apply to every budget?

The 50-30-20 rule does not apply to every budget, rather, it is based on your income and expenses. It can work very well for people whose expenses are approximately half their income.

However, if you find that your expenses take a larger portion of your income, then you may want to try a different budget.

Is the 50-30-20 budget gross or net?

The 50-30-20 rule is based on net income, not gross. You make your budget with the money that you have after taxes.

Otherwise, your numbers won’t be accurate because money still has to come out of your income for taxes, so you are overestimating the amount you have to spend.

What are the flaws of the 50-30-20 rule?

The flaws of the 50-30-20 rule mostly have to do with preference and income.

Your preference may be to spend more on savings and less on fun money, in which case you might not like the 30% wants category.

Even though it does have flaws, you may find that it works well for your lifestyle.

Is the 50-30-20 rule weekly or monthly?

The 50-30-20 rule applies to your monthly income and monthly expenses list. So the entire budget is based on what you make in a month.

Doing this budget weekly would be time-consuming and confusing, so it’s best to do this once a month and calculate your entire monthly income at one time.

Articles related to the 50-30-20 budget

If you enjoyed reading about the 50-30-20 rule, learn more about budgeting by checking out these articles next!

• 10 Of The Best Budget Templates And Tools
• 7 Money Ratios Every Clever Girl Should Know
• What Is The 60-20-20 Rule And How Does It Work?
• 10% Rule: Is Saving 10% Enough?

Leverage the 50-30-20 budget today!

Budgeting doesn’t have to be difficult, and this option is a great way to start your money goals quickly and easily, especially if you decide to use the 50 30 20 budget template.

Remember to use your post-tax income as your base and divide your money from there. Now that you have all the steps in place go ahead and get started!

P.S. Here are other budgeting methods to explore. The 80/20 budget, the 60 20 20 rule, the 70-20-10 budget, and also the 30-30-30-10 budget!

The post The 50-30-20 Rule: How It Works + A 50 30 20 Budget Template appeared first on Clever Girl Finance.

In personal finance, where income, expenses, dreams, and aspirations converge, the budget emerges as a crucial tool. It’s not just a set of numbers, rather, it’s a strategic plan that empowers you to navigate the complexities of financial decisions. And when you have a family, creating a family budget becomes even more important.

In this guide, we’re diving into how to create a family budget that works for your family and its unique circumstances.

From understanding fundamental principles to mastering practical steps, you’ll acquire the skills to start a budget that goes beyond being a mere spreadsheet to being a financial tool guiding you toward your financial goals. 

So let’s get into creating a budget for the family that genuinely suits your needs!

What is a family budget?

A family budget is a tool that makes managing money for an entire household easier. 

The budget helps you decide how to allocate income so that you are not only taking care of your bills but also making progress toward your goals. 

In short, this budget guides your decision-making, helping you balance present obligations and future aspirations for a well-rounded lifestyle for you and your household.

8 steps for how to create a family budget that actually works

Now for the nitty-gritty of crafting a family budget that’s not just a piece of paper but a practical roadmap to financial success. 

In these eight steps, we’ll learn how to budget effectively, ensuring your family’s goals and aspirations are at the forefront of every financial decision.

1. Gather your financial information

Start by piecing together your current financial position. 

Gather your recent bank statements, utility bills, pay stubs, and credit card statements. These documents provide a clear view of your income sources and expenses, and then offer essential pieces of the financial puzzle. 

This step is about awareness—understanding where your money comes from and where it goes. By gathering this information, you’re arming yourself with the tools and insights needed to make informed financial decisions.

2. Define your short-term and long-term goals

Now that you’ve got a grip on your financial picture, it’s time to plot your course. 

First, outline your short-term goals—those you’d like to achieve within the next year or so. Maybe it’s tackling credit card debt, going on a family vacation, or a home renovation project.

Then, set your sights on the long term. 

These are the bigger dreams that might take a few years to accomplish—think of buying a forever house, funding your child’s education without taking out student loans, or having a long and comfortable retirement.

In addition, your goals will shape where you allocate your money, ensuring every dollar takes you closer to what matters most to your family.

So, take a moment to reflect on and define those goals. You can even use examples of financial goals.

3. Include savings goals

Now, let’s talk about one of the most important players in your budget game: savings. These goals are all about securing your future.

For instance, savings goals might include:

• Unexpected events and emergencies
• Starting a business
• Professional development
• Estate planning
• Funds for aging parents’ care and support
• Charitable donations
• Starting a family or growing the one you already have

In addition, by making savings a non-negotiable line item in your budget, you’re essentially saying, “Hey, future, we’re ready for you!” 

This disciplined approach strengthens your financial foundation and ensures you’re prepared for life’s surprises and opportunities. 

4. Be realistic

If you want to have a family budget, dreaming big is fantastic, but it’s crucial to keep things doable when it comes to your budget. 

Your goals should push you forward without knocking your financial stability off balance. 

This keeps you motivated and steadily moving toward your financial aspirations. 

For instance, let’s say your current monthly savings are $200. A realistic goal could be to boost that to $300 per month—a challenging yet attainable step forward.

In contrast, an unrealistic goal might be to save $1,000 per month, which could strain your finances and cause frustration.

Remember, the key is to stretch yourself without snapping. By setting goals that match your financial landscape, you’re ensuring steady progress and avoiding burnout. 

5. Identify needs vs. wants based on your family values and goals

With your goals in sight, it’s time to sort out priorities. 

For example, think of your budget as a filter, separating needs from wants. 

List your essential needs—housing, groceries, utilities, and healthcare. These are the must-haves that keep your family running smoothly.

Then, consider your wants. These are the extras, the nice-to-haves that enhance your lifestyle but aren’t necessities. This includes eating out, equipment for hobbies, seasonal home decor, and entertainment subscriptions.

Most importantly, at the end of the day, you want to get your spending and monthly expenses list aligned with what matters most to your family.

And cut all other expenses as much as possible. 

6. Plan ahead for special occasions

Life is brimming with moments that deserve a celebration, whether birthdays, holidays, or other milestones. 

But let’s not forget that these festivities can sometimes come with extra expenses. 

That’s where your budget comes to the rescue. So be proactive by including these special occasions in your financial plan. 

For instance, to include these special occasions in your budget, set aside a separate category for the “Special Occasions Fund.” Allocate a specific amount of money each month to this fund so that you’re prepared financially when these events come knocking. 

For example, suppose you know your child’s birthday is in six months, and you anticipate spending $300 on gifts, decorations, and a party. In that case, you can set aside $50 monthly in your Special Occasions Fund. 

By thinking ahead, you can relish these joyful times without worrying about their impact on your wallet.

7. Track and review regularly

You’ve crafted your budget—now it’s time to maintain it.

Set aside time each week to track your spending against your budgeted amounts, or consider budgeting weekly. This practice isn’t about perfection, however, it is about staying aware and accountable.

As you review, look for the following:

• Consistent overspending in “want” categories, such as dining out or entertainment
• Unexpected costs that may have cropped up during the week and how they impact your budget 
• Progress toward your savings and debt reduction goals
• Expenses that may vary throughout the year, like back-to-school shopping or holiday-related costs

Adjustments are a natural part of the process. 

It’s like fine-tuning a musical instrument to produce harmony. The key is to make those tweaks and keep your budget aligned with your family’s evolving needs and aspirations. 

For example, let’s say you’ve been consistently overspending on entertainment, allocating $100 per month but spending around $150. This trend could lead to an annual overspend of $600. 

By identifying this pattern during your weekly review, you can decide whether to adjust your entertainment budget or find cost-effective alternatives to manage your expenses better.

8. Get your kids involved

This step isn’t just about teaching—it’s about empowering the next generation with financial know-how by teaching financial literacy for kids. 

For example, start by having age-appropriate conversations about money. Share stories, discuss saving and spending, and let them make small decisions within limits.

As they grow, involve them in budget discussions. 

Show them how you allocate funds, prioritize needs, and save for goals. This hands-on experience lays the foundation for responsible money management as they approach adulthood.

Other ways to involve your kids in the family budget may include:

• Having them pick which of their “wants” to prioritize
• Having them set their own savings goals
• Giving them a small grocery budget and teaching them how to compare prices, stick to the list, and look for discounts

When you involve your kids in the family budgeting process, you’re not just building financial skills but nurturing a lifelong sense of financial responsibility. 

Teaching budgeting for kids helps them be confident and capable of handling their own financials. 

Expert tip: budget for irregular expenses

Have you ever been caught off guard by unexpected expenses that mess up your budget? It happens to all of us.

But here’s the good news: there’s a smart way to handle these surprises and keep your finances on track. Review prior years’ financials and identify any recurring irregular expenses.

Look for: car repairs and maintenance, medical expenses, home maintenance, membership renewal, seasonal utility increases, vehicle registration renewal, back to school supplies and field trips, tax preparation fees.

You’re already a step ahead by recognizing these possibilities and quantifying them. Now, set aside some money each month to build a buffer against these unexpected costs.

Why should you specifically have a “family budget”?

A family budget puts you in the driver’s seat regarding your spending. 

No more puzzling over where your money vanished to or how to stop spending money—instead, you’re in charge, dictating where each dollar goes and also turning spending into a deliberate and informed choice.

But there’s more to it. Think of a budget for the family as a shared playbook. 

It’s a platform where every family member gathers, understands the financial game plan, and gets on the same page about financial objectives. Additionally, this unity can go a long way in fostering a clearer understanding of financial priorities and a collaborative approach to managing money.

In addition, perhaps the most impactful aspect is the conversation it sparks.

A budget for the family dismantles the barriers often surrounding money discussions. It creates an environment where money becomes an openly discussed topic—no more hushed conversations or avoidance. 

Instead, financial matters become approachable and open, facilitating candid and productive exchanges.

Categories to include in your family budget

A typical budget encompasses various categories that cater to the unique needs of a household, especially when children are part of the equation. Tailor your budget template to suit your family’s lifestyle, and adjust as your circumstances change.

However, some essential categories should be included in a comprehensive budget.

Housing

This category covers your mortgage or rent payments, property taxes, insurance, and home maintenance expenses.

Additionally, family-sized homes often require budgeting for utilities like water, electricity, and gas. Quicken explains that this is often the most expensive budgeting category.

Groceries

With growing appetites and nutritional needs, families typically allocate a relatively large portion of their budget to groceries. This category includes everything from food essentials to household supplies. However you can try out the cheapest grocery list to save on costs!

Childcare and education

Families with children need to budget for childcare, school tuition, books, uniforms, and extracurricular activities. These expenses vary depending on the age of your children and the educational options you choose.

Healthcare

Medical expenses are a critical consideration for every family budget. These include health insurance premiums, doctor visits, prescriptions, and potential emergency medical costs.

Transportation

Transportation costs can add up with multiple family members potentially commuting to work, school, and activities. This category includes car payments, fuel, maintenance, and public transportation fares.

Savings and investments

Prioritizing savings and investments for your family’s future is crucial. This category might include retirement contributions, college funds for your children, and emergency fund savings.

Debt repayment

Allocating a portion of your budget to debt repayment is essential to maintain financial stability. Especially if you have personal loans or if you want to reduce credit card debt.

Entertainment and recreation

Families also need to enjoy quality time together. This category can cover family outings, vacations, hobbies, and additionally, leisure activities.

Clothing and personal care

Children’s growth spurts and changing fashion trends mean this category needs to be included in your budget. Also include personal care items like toiletries and haircuts.

Charitable giving

Many families allocate a portion of their budget to charitable donations, teaching children the importance of giving back to the community.

Expenses unique to families with kids

Additional costs you may incur in support of your children should also be included in your family budget.

However, these costs will fluctuate as your kids get older.

So let’s break these down by age:

• Newborn to 3 years old
• 4 to 12 years old
• 13 to 18 years old

Newborn to 3 years old

In this phase of rapid development, careful financial planning becomes essential to ensure that you can provide your child with the best possible start in life. 

From the basics of diapering to the complexities of childcare arrangements, this is the time to lay a solid foundation for both your child’s well-being and your family’s financial health.

So be sure to include the following in your budget, especially when preparing for a baby:

• Diapers and baby wipes (and lots of them)
• Formula and baby food
• Strollers, cribs, car seats
• Toys
• Medical expenses from the frequency of doctor’s appointments 
• Daycare, nanny, night nurse

4 to 12 years old

During this dynamic phase of childhood, your kids are developing their personalities, interests, and a deeper understanding of the world around them. 

They start school, build friendships, and also find hobbies.

From education-related costs to extracurricular activities and their evolving social lives, each aspect demands careful financial consideration. 

If your kids are within the 4 to 12 years of age group, include these in your budget:

• Frequent new clothes as they grow quickly at this stage
• College fund
• Snacks
• Extracurriculars like sports, singing, musical instruments, dance, and art
• Travel
• Preschool
• Birthday party gifts for your kids’ friends and birthday parties for your kid
• School field trips
• Summer camp
• Allowance
• School supplies
• Medical expenses for cold and flu bugs brought home from school
• “Big kid” beds and other bedroom supplies

13 to 18 years old

As your children approach the final stretch of childhood, the years from 13 to 18 emerge as a period of remarkable self-discovery and preparation for the exciting journey into adulthood. 

By understanding and preparing for the financial commitments that come with this phase, you’ll be better equipped to foster your child’s development, exploration, and pursuit of their dreams. This is also a good time to teach investments for teens!

For these final few years of childhood, you will want to budget for the following:

• Phones, laptops, iPads
• College applications
• Tutors
• School supplies
• A car
• Car insurance
• Field trips and social events
• Lessons and equipment for hobbies

What is a reasonable family budget?

A reasonable family budget is highly personal and depends on your expenses.

For instance, if you have a larger family, your budget may need to allocate more resources to expenses like groceries, utilities, and possibly larger housing.

On the other hand, a smaller family might have different priorities, with more flexibility in certain areas. 

Similarly, where you live plays a significant role. Urban areas often come with higher housing costs and transportation expenses.

In contrast, rural areas may offer more affordability.

That said, no matter your circumstances, a good rule of thumb for a reasonable budget is to follow the 50-30-20 budget template guideline. Approximately 50% of your income is for necessities, 30% for wants, and 20% for goals.

How does a typical family budget look?

A typical family budget splits your money into different categories of income, goals, needs, and wants.

This includes what you spend on where you live, like rent and utilities, as well as money for food and going out to eat. You’ll also set aside cash for getting your family around, like car payments, gas, and insurance. 

The budget covers school stuff, too, as well as savings for the future (college fund, anyone?) and having fun together on family vacations. 

By checking and adjusting the budget, you can stay in control of your money and reach your individual and joint goals.

What is the average family monthly budget?

The average household monthly spending budget in the United States is approximately $5,111, Value Penguin claims.

For instance, it could be broken down as follows:

• Rent, mortgage, interest, property tax, maintenance: $1,884
• Utilities: $800
• Groceries: $627
• Car payments, gas, insurance, maintenance, and public transportation: $800
• Health insurance and care: $450
• Eating out: $200
• Clothing and shoes: $150
• Entertainment: $200

You will also spend on income taxes and social security, often taken out before you receive your paycheck, and thus not necessarily a needed category in your family budget.

Articles related to budgets

If you learned a lot from this article, check out these other great posts about families and budgets!

• How Does The 60 30 10 Rule Work For Budgeting?
• How To Budget: Budgeting Methods And Budget Categories
• Budgeting For Kids: How To Get Them Started
• Rules Of Loaning Money To Family (And Friends)

Build a bright financial future with a budget for your family!

Creating a family budget is an evolving process. 

It provides a structured framework that allows everyone to work together towards common goals while ensuring financial stability and avoiding family financial problems.

As you navigate the process, the steps outlined in this guide offer a roadmap to success, and you can also use one of the best budget templates. 

Involving your children in family budgeting fosters financial literacy and open communication about money matters from an early age. By taking charge of your finances through a budget, you’re building a bright future and getting your financial house in order.

The post How To Create A Family Budget That Works For Your Family appeared first on Clever Girl Finance.

Managing your budget is essential, and there are plenty of ways to do it. The cash envelope system is one of the most useful tools you can use to get on top of your finances. However, if you want the best chance of success, you have to choose the right cash envelope categories, and luckily, you’ve come to the right place. 

In the following guide, we will take a look at some example cash envelope system categories to give you some inspiration. Here’s what you need to know to get started!

Benefits of leveraging cash envelope categories

While you can use either a cash envelope wallet or a digital envelope system, the fundamentals of this approach are the same.

And if you’re ready to get started with this budgeting system, you will need clear cash stuffing categories. So let’s take a look at the key reasons planning your categories works: 

Avoid impulse spending

Are you guilty of impulse spending? This habit can drain your finances quickly and leave you wondering where your paycheck went.

However, having solid cash envelope categories helps you decide where to spend your money in advance, giving you total control here. 

Improves your ability to save money

For many of us, saving money can be challenging. If you have struggled with this in the past, using cash envelope categories may be the answer. You have total control over the cash stuffing categories, and so you can create envelopes that suit your lifestyle and help you spend less.

When you feel as though saving is all work and no play, you can account for spending money on fun things in advance with this system and start to live richer.

For example, you may choose to have a “fun” category or an “entertainment” category. 

Better understand your finances

A massive 77% of Americans are anxious about their finances, and failing to understand them plays a major role in that. Deciding on which cash envelope system categories to use will make you think more deeply about the money that you spend. 

Going through this process means that you will have a cold, hard look at your income and also your outgoings. When you do that, you will begin to have a better grasp on your finances. 

Learn where the bulk of your money goes

Do you know where your money goes? When we categorize our spending, it’s easier to visualize our spending habits. There’s an element of trial and error here. 

Once you start using cash envelope categories, you will have to guesstimate how much you spend on each thing.

However, the longer you use this system, the better you will understand your finances and how much you spend in each area.   

20 cash envelope system categories to consider

The cash envelope categories you choose will depend on your lifestyle and how you prefer to spend your money. If you are not sure where to start, we’ve got some inspiration for you. So let’s take a look at 20 of the most common example categories you could use: 

1. Rent or mortgage

Before you start thinking about your other cash envelope categories, here’s one non-negotiable. Chances are, your mortgage or rent payment is the same each month. So, you can set aside the same amount for this ongoing outgoing. 

2. Utilities

On the other hand, your utility payments will fluctuate throughout the year. You may pay more for gas during the winter as your usage goes up. Dealing with the ups and downs in how much you pay can be difficult — that’s where this system comes in. 

Putting an average amount into this cash envelope every month means that you will have some cash left over (though it’s also important to work on how to lower electric bill costs). So, when the cooler months come around, you are well-prepared. 

3. Food and groceries

Many of us have zero idea how much we spend on food and groceries each month. It’s not simply about the main shopping trip you do. You also need to account for the extra items you buy throughout the month.

Having a cash envelope category for this spending is essential in addition to practicing budget meal planning. 

4. Cleaning products

While spending your money on cleaning products may not be fun, it is important.

You need to top up your stock of items every now and then. Setting aside money for this pesky cost will help you with your overall budget management. 

5. Household items

Household items may include toilet rolls, paper towels, plants, ornaments, or even new blankets.

While I won’t always need to buy new things for my home, I know that having a budget for these costs means that my spending never comes as a nasty surprise. 

6. Transport

Are you a jet setter? If you’re always on the go, you’re going to need to put aside some money for travel or a vacation budget.

This cash envelope may cover your fuel costs, train tickets, bus tickets, and also airfare. Whether you commute or just like to get around, make a budget for it. 

7. Eating out (or in!)

The average American family spends $2,375 per year on eating out. If you’re a foodie and love sampling dishes, you need to include this as one of your cash envelope categories.

You can either do separate envelopes for eating out and takeout or combine the two. 

8. Kids fund

If you have a family, there’s no doubt that a large portion of your budget will go to your children. Having a separate cash envelope for your little ones is the way to go.

This money may cover their childcare, days out, clothing, food, and any extras, such as clubs. 

9. Garden

Should you have green fingers, this next cash envelope category is for you. Gardening tools and furniture are not cheap.

Personally, I like to consider how much I spend on this pastime on average. Then I may need to adjust how much I set aside as I go with this one. 

10. Personal care

You can’t put a price on self-care… Okay, maybe you can. When you’re choosing which cash envelope categories to use, don’t overlook this one.

This part of your budget covers haircuts, massages, beauty treatments, an occasional self care week, and also hygiene products.

11. Clothing and shoes

Learning how to stop buying clothes that you don’t wear takes time, but it’s a habit that will drain your finances. To help you stay on track, create a clothing and shoes cash envelope category.

Put the same amount in this envelope every month, and you will find that the budget soon starts to pile up. 

12. “Fun” spending money

We all deserve to have some fun now and then. You work hard, and so you should spend some of your money on enjoying yourself.

That may mean having a day out with the family, doing an activity, or buying a new game. The choice is yours. 

13. Vacations

Want to leave your troubles far behind you? Heading to a remote beach or taking a city break may be the answer.

In a survey from Forbes, almost half of people said they plan to spend $4,000 a year on vacation. Start planning your next trip by saving money in a cash envelope. 

14. Makeup and beauty

When you look your best, you feel even better. We all have unique makeup and beauty routines that work for us. When you are planning your cash envelope categories, it’s smart to include this one in your list. 

15. Pet fund

Do you have a furry friend that you love? Pets are a wonderful addition to any family, but they can also be expensive.

Figure out how much you spend on vet bills, pet food, and pet-related products. You will need to find an average here to create your envelope. 

16. Entertainment

Whether it’s a night out at the movies or attending a Taylor Swift concert, we all need to be entertained.

However, splurging thousands on tickets without having a budget is a mistake. When you set aside money for this particular cost, everything becomes easier. 

17. Events

Next up, let’s talk about events and how much they cost you. That may be your cousin’s bachelorette party, a wedding, or even someone’s 60th birthday party.

All of the above can put a serious dent in your wallet unless you have budgeted for them well in advance. 

18. Date nights

When was the last time you and your partner spent some quality time together? Setting aside both the time and money for this is important.

Think about the type of dates you enjoy and how much they typically cost when planning your budget, and consider at home date night ideas. 

19. Gifts

Giving something special to a loved one is priceless.

While there are plenty of inexpensive thank you gift ideas as well as birthday and holiday gifts, you still need to budget for them. Including this as one of your cash envelope categories means you will have the money to treat your nearest and dearest. 

20. Emergency

Emergencies can arise when you don’t expect it. You might find that your car breaks down or your roof needs fixing. These problems cost a lot to solve, so you need to plan ahead for it. 

More than 50% of Americans cannot afford to spend $1000 on an emergency situation. Set aside a decent amount of money in case of unexpected costs in an emergency fund. 

Expert tip: Switch up your envelopes as needed

As many people start to use the cash envelope system, we will each learn where the majority of our money goes. We can change the amount we use in each envelope depending on what we learn along the way. This way, we can switch up our envelopes as needed.

How should I label my cash envelopes?

You can label your cash envelope categories in a couple of different ways. If you’re using a digital system, you can use a banking or budgeting app to manage your money and divide it into categories digitally.

When you’re using physical envelopes, you can use a marker pen to label each category and put cash in envelopes. 

How do you organize cash envelopes?

You can organize your cash envelopes with a filing system or cash envelope wallet.

Once you have filled each of your cash envelopes, you need to store them. You can keep them in a filing drawer and take out the ones that you want to use. Storing them away could also help you stop spending money in categories you’re not using. 

There are also cash envelope wallets you can buy to keep things organized.

And if you’re using an app or digital device, be sure to check in on it each day and keep it updated when you spend. That way, you’ll know how much money is left in each category.

What is an example of a cash envelope?

Some of the most common cash envelope categories examples are food and groceries, rent and mortgage, utilities, entertainment, fun, gardening, personal care, and emergency funds. 

You may also choose very specific cash stuffing categories based on what you want to buy.

For instance, “shopping for handbags” or “money for books.”

Articles related to cash envelope categories

If you enjoyed reading this article about the cash envelope system and cash envelope categories, try reading these next!

• How To Use The Cash Envelope System To Master Your Budget
• Save $5k With The 200 Envelope Challenge!
• How To Budget: Budgeting Methods And Budget Categories
• How To Use A Digital Envelope System

Choose your cash envelope categories now!

If you are going to use the cash envelope system, deciding which categories suit your lifestyle and needs is the first step. You can take a look at the category examples we have highlighted in this guide and use them or simply come up with your own. 

Each of us has a different income and varying commitments. So, what works for you may not work for someone else, and you can do things differently based on your budget. Take the time to consider your money habits when choosing your cash envelope system categories. 

The post 20 Cash Envelope Categories For Your Cash Budget appeared first on Clever Girl Finance.

Budgeting is one of the most important financial habits to develop. There are so many budgeting methods out there to choose from, but it’s not just creating a budget that will set you up for financial success. Instead, it’s important to learn how to budget well by using a monthly expenses list so you don’t forget about any costs.

In order to budget well, it’s essential that we include all of our monthly bills and costs in our budgets. Unfortunately, this is a little harder than it sounds. And this is because there are so many monthly expenses list items that we tend to forget to include in our budgets.

Hardly anyone would forget to include their rent or mortgage payment in their budget, but there are so many spending and money habits that tend to slip our minds. Not to mention variable expenses! When you forget to include them, it can wreak havoc on your budget.

Whether you already have a budget that is in need of updating or you are creating your first one, here we’ll go over some of these often-overlooked purchases that you should include in your budget so that you, too, can budget well.

Monthly expenses list: 29 Commonly overlooked items

Do you have the items from this commonly overlooked monthly expenses list in your budget? Review the list below to determine what’s applicable to you and incorporate them into your budget starting today!

1. Emergency fund

Just because a third party isn’t billing you monthly for it doesn’t mean you can afford to forget about your emergency fund. Build a contribution to your emergency fund into your budget. That way, you’ll be able to afford any unexpected (and not budgeted for) costs that may arise.

The commonly accepted amount to save is 3-6 months of your living expenses. But you may choose to include more money in your emergency fund, depending on how stable your financial situation is.

2. Retirement fund

Like your emergency fund, nobody is going to force you to contribute to your retirement, but you still should if you can. By adding this amount to your monthly budget, you’ll hold yourself accountable. Plus, you’ll set yourself up to be in the best financial position when it comes time to retire.

There are 401ks and 401k alternatives, IRAs, and other options for investing. There are plenty of tips for retirement planning if you aren’t sure where to start.

Choose the one that works best for you, or combine more than one retirement savings method.

3. Extra debt payments

If you have credit card debt, you want to pay the minimum payment every month, at the very least. If you want to reduce credit card debt, you will want to make more than your monthly minimum payments.

Don’t forget to include these extra debt payments in your list of monthly bills. And if I have debt to pay off, it helps me to come up with a plan to pay off my debt, including a timeline for when I will pay off everything I owe.

4. Quarterly or annual bills

The majority of bills come monthly, but not all. Comb through your past payments and take stock of all bills that you pay less frequently.

For instance, a quarterly water bill or annual professional association membership dues. Then, calculate how much that amount costs on a prorated, monthly basis, and include that figure in your monthly budget.

5. Home or renter’s insurance

Most homeowners choose to insure their belongings with homeowners insurance, and many apartment buildings require renters to carry renter’s insurance.

If you think you might forget or you want to simplify, you can combine your homeowner’s insurance with your mortgage payment.

Renter’s insurance costs are typically quite low, less than $20 per month in most cases. You can think of it as part of your monthly rent payment.

6. Medical visit co-pays and HSA

Your health insurance should cover the cost of most medical appointments, but it is important to budget for co-pays. At around $25 (or more) per visit, these co-pays can add up, even if you only go to the doctor for routine appointments.

If you visit the doctor often, be sure to estimate how many times a month you go. Be sure to account for these costs in your budget.

You may also choose to save money in an HSA (health savings account). There are specific amounts you can contribute, and whether this is an option for you also depends on your health plan. But if you do contribute to an HSA, don’t forget to budget for it.

7. Dental and/or vision costs

Even if you have health insurance, vision and dental expenses are often not covered under that health insurance. Sometimes separate vision and dental insurance will cover part, but not all, of your expenses.

Make sure to include charges such as teeth cleaning, new glasses, and contact lenses as monthly expenses list items in your budget.

First, determine is dental insurance worth it for you, as well as vision insurance, and if not, plan for the costs in advance.

8. Prescription medication

Another one of the medical-related monthly bills that many often forget is prescription medication.

Prescription drugs cost the average American over $1,000 a year! While your health insurance will likely pay for much of that, remember to account for your out-of-pocket costs in your monthly budget.

9. Parking and toll fees

Most people don’t forget their car payments in their monthly costs, but that’s not all it costs for car expenses. Especially if you commute to work, you will likely pay tolls and or parking fees.

Add up the total you spend on all extra fees for your car each month to get an accurate estimate.

10. Subscription renewals

Whether it’s your daily newspaper, a beauty box, Spotify, Hulu, Amazon Prime, Netflix, or gym memberships, there are seemingly endless subscription and membership options.

$12.99 might not seem like a ton of money, but, in my opinion, it can throw off your budget if you forget to include it. Know how much your subscriptions cost and when the money is due, and be sure to get rid of any subscriptions or memberships you don’t use.

11. Beauty expenses

Reports vary widely on how much women spend on makeup and beauty products, but needless to say, it can be a lot. 

One survey found that the average woman spends $300,000 on face products over the course of her lifetime! Even if you are on the low end of the average, you likely replenish a beauty product or two or personal care products every month.

If so, be sure to include those monthly expenses list items in your budget.

12. Cleaning supplies

Grocery store items that don’t need to be replenished every week or month are often overlooked when it comes to a monthly expenses list. Cleaning supplies, laundry detergent, and the like can really add up.

Be prepared for an extra expensive grocery shopping trip once a month or every couple of months to account for these costs, and try frugal grocery shopping during the other weeks.

13. Backup childcare

If you have children you probably pay for childcare of some sort. Or you may count on school to watch your kids for a large portion of most days.

But things interfere with your regular scheduled childcare all of the time. When they do, and you need to find and pay for backup childcare, you’ll be happy when you have anticipated this cost and budgeted for it.

In addition to saving money for backup childcare, you should also save for extra expenses that come up throughout the year, other than regular daycare costs.

For instance, extra costs for school events or tuition payments that cost more than expected.

14. Dry cleaning

Depending on your job and your wardrobe, dry cleaning might be something you do every week, every month, or only occasionally. No matter what, you’ll likely have at least a couple of items that will require a trip to the dry cleaners, and these should be included in your budget, too.

Try to reduce your dry cleaning costs, but plan for them when needed.

15. Formal occasion clothes

You might not need a new formal dress or suit very often, but an occasion will probably arise every so often that requires one. While you can be fashionable on a budget, formal events sometimes call for a splurge or a new pair of shoes, and it’s always best to budget for this in advance.

In addition, you may want to save up a bit of money each month for regular clothing purchases as needed. You won’t need to spend money on this every month, but maybe a few times a year, so it’s good to be prepared.

16. Hobby supplies

Are you an avid gardener, knitter, baker, or something else? Hobbies can keep us sane (especially stress relieving hobbies!) and are definitely worth the cost.

Just remember to account for how much it costs to keep up with your hobby in your budget.

Add up the individual costs that you spend on your hobby each month (supplies, classes, etc.), and then add all of those together to know how much to set aside monthly.

17. Donations

Giving is popular around the holidays, but many people make charitable giving a part of their budget all year long.

Whether you like to support your alma mater, friends participating in half-marathons and the charities they are running for, or any other worthy cause, be sure to remember this when you prepare your budget, too.

18. Gifts

Christmas and birthday gift expenses are big-spending holidays for many people. If they are for you, you should take into account everyone you plan to buy a present, even if you’re planning to do Christmas on a budget.

Don’t forget about other holidays where you might give gifts, too.

For example, that Easter basket doesn’t magically arrive on your kid’s doorstep for free, right (or does it)?

19. Holiday extras

In addition to gifts, there are plenty of other ways to spend money over the holidays. From hosting a cocktail party for friends to decorating my home, I like to be sure to include whatever “extras” I like to spend during the holidays as part of my monthly cost calculation.

Don’t forget about baking and cooking supplies, a Christmas party at work, wrapping paper, etc.

20. Fun money

Lastly, what would a budget or life be without some room for unexpected fun?

By putting aside a fun money amount dedicated to spontaneous events, like a day trip to the beach, drinks with friends, or a date night with your husband, you’ll be able to enjoy these activities without stressing over whether or not they’ll break your budget.

Things like entertainment, shopping purchases, or anything else that comes up during the month are important to include in your budget.

21. Specific utilities

There are several specific utilities you should add to your monthly expenses list. Some of them may be bundled together in one bill, or they may arrive separately. Either way, don’t forget about them!

• Water
• Cable (or cable alternatives)
• Electricity
• Heating and air conditioning
• Cell phone bill
• Internet

22. Gas

Does the amount of money you spend on gas for your car change from month to month? If your commute changes, you start carpooling, or you travel, then you need to account for the changes in your budget. Transportation costs are easy to overlook, but they are unavoidable.

Costs also apply if you take public transportation. You may still have different costs for the bus, subway, or Uber from month to month.

23. Life insurance

If you’re familiar with the importance of life insurance, then you will likely have a monthly cost for this. Depending on the type of insurance you have, your monthly rates will vary quite a bit.

Find out what you are spending each month for your life insurance premium, and don’t forget to include it in your expenses.

24. Pet care and supplies

If you have pets, your list of monthly bills is not complete without adding in this cost. Account for the cost of pet food, vet bills, supplies, etc.

You may want to set up a separate fund just for your pets. That way, you can afford to buy your dog a new toy or leash every now and then.

And keep in mind that pet care costs may vary by month. Especially if you buy pet food in bulk and only visit the vet once or twice a year. Plan in advance for the months that cost more.

If you are a first time dog owner or a first time cat owner, research costs in advance so you can add them to your budget.

25. Traveling funds

If you are someone who travels frequently for work or you just have a vacation coming up, you’ll need to include traveling funds in your vacation budget plans. Traveling costs can end up being quite expensive, so you can split the savings over a few months, that way, it doesn’t seem like as much.

Keep in mind that traveling can often cost more than you think, with airfare, hotel costs, dining out during your trip, etc., so it’s best to overbudget rather than budget less money.

26. HOA fees and property taxes

Since these types of costs are not always monthly costs but sometimes every quarter for HOA fees or even once a year for property taxes, it’s easy to forget them.

Instead, you can set aside a bit of money for them each month so you’ll be ready when the fees are due.

HOA (homeowners association) fees don’t apply to everyone, but if you have them, make sure you’re aware of the amount.

Property taxes apply to all homeowners.

27. Home repairs and costs

Home repairs can be anything from pest control to saving up for unexpected costs like plumbing repairs. Save money each month for your home for both large and small costs.

Consider things like painting, remodels, a new roof, or your a/c or heater breaking that you may need savings for.

28. Sinking funds

For me, a list of monthly expenses would not be complete without sinking funds. If I have a big expense coming up in the next year or the next few years, it’s important to me to start saving now.

You can add a specific amount of money to your sinking fund each month so you are prepared when the charges come up, such as an expensive vacation, buying a home or rental property, etc.

Alternatively, create sinking funds categories and save for several different things.

29. Auto insurance

If you have a car, then you need to have auto insurance. The typical cost for car insurance is about $168 for full coverage each month, though costs can vary.

There are a lot of options for how often you pay car insurance, from monthly to a couple of times a year or even once a year. You can decide what works best for your budget.

Expert tip: Check your bank statements for accuracy often

There are many costs that it can be easy to overlook in your monthly budget. As you look through this list, think about which ones apply to you. Not all of them will and there may be others that aren’t on the list.

To avoid being caught unprepared for extra monthly costs, I recommend looking back over your bank and also credit card statements to see if there is any spending you didn’t account for.

Budgeting tips to stay on top of your monthly expenses

All of these costs are essential to remember in your budget and monthly expenses list.

But don’t forget the most important thing – you need to make a budget to begin with! Here are some tips to help you create a great budget and plan for the unexpected.

Choose the right budget for you

There are several ways that you can make a budget, from the 80/20 budget to using the best budget templates. Find a method that is easy for you to use, even if this takes some trial and error.

You’ll need to divide your expenses by budget category, and then you can figure out your average monthly cost of expenses. A worksheet, budget calendar, or budget calculator can be immensely helpful in this situation. 

Don’t forget to include the financial goals you’re working toward, all your expenses, and make a plan for what you’ll do with any extra money.

Account for changes to your budget

Remember, your budget is not going to look the same every month. After all, you have different obligations, responsibilities, and different plans and events to attend each month.

Use the ideas above to determine what you might normally forget to add to your budget, and spend some time thinking about what your month looks like before you create a budget you want to stick to. 

What are examples of monthly expenses?

There are plenty of examples of monthly expenses, such as rent or a mortgage, utilities, and groceries.

However, there are many less obvious costs that are easy to forget about and will then create budget challenges. These include prescriptions and health costs, birthday gifts, and expenses that are quarterly or annual.

Rather than forgetting about these expenses, you can build them into your budget each month with sinking funds and a detailed plan for your spending.

How do I plan for variable vs fixed expenses in my budget?

You can plan for variable vs fixed expenses in your budget by utilizing an organized spreadsheet or budgeting app and also saving up for variable expenses.

Fixed costs are the same every month, and variable ones may cost different amounts each time.

For instance, your rent payment is probably always the same, but your water bill or light bill may vary each month.

To account for variable costs, you can set aside the average amount that each category costs and assume you’ll spend that amount.

However, it is safer to plan for the charges to cost more than expected, so you’ll have enough money.

Wondering what to do with savings when you overprepare? You can save any excess in a savings account for your variable expenses. When things cost more than you thought they would, you can use the money in that account to cover the difference.

What are average expenses for a household?

The average monthly expenses for a household total about $5,111 a month. There’s a lot to pay for each month for the average household, from housing to food costs, etc.

Although your individual costs may vary for your own household, it’s a good idea to know the average cost that you spend on necessities and extras each month. That way, you can make plans for how much to save and what you can afford in the future.

What is the average person’s monthly expenses?

According to the consumer expenditures report from the U.S Bureau of Labor Statistics, average monthly expenses are about $3,405 each month for a single person. That said, your own spending may or may not match this.

One way to be sure is to total up how much you spent in the last year or so and then see what you typically spend each month and what you spend in more expensive months, such as in December for holidays.

You can try to lower your expenses by spending less on non-essentials and also being prepared for commonly forgotten expenses in advance so you don’t turn to credit cards to pay them.

How can you create a more accurate budget using your list of monthly expenses?

To create a more accurate budget using your list of monthly expenses, think about what’s not working well for you.

It’s easy to forget about certain expenses when calculating your monthly budget. Why? One reason expenses can slip your mind is if you don’t write down your budget, item by item.

If you think you are following a budget, but it’s not written down, you very likely are not sticking to whatever it is you think you are following.

People also often forget to include the full cost of certain expenses because they rely on mental calculations about how much something costs. When you do this, you can end up underestimating the true amount you spend.

Lastly, many people don’t account for sporadic spending or things that aren’t billed monthly. Quarterly or annual fees can surprise you and add up if you forget to prorate them and include them in your monthly budget.

If you are struggling with creating a budget, there are numerous tools available to put you on the right track.

As a first step to creating an accurate budget, review the commonly overlooked expenses we cover in this article. If you remember to include these in your budget going forward, you’ll be that much closer to having an accurate and useful budget.

Articles related to a monthly expenses list

If you enjoyed reading this, you’ll love these other articles about expenses and budgets!

• 10 Of The Best Budget Templates And Tools
• Example Of A Budget To Help You Craft Your Own
• How To Plan Your Finances If You’re Getting Paid Monthly
• The Best Way To Keep Track Of Bills And Payments

Overlook these monthly bills no more!

Budgeting is an art. It takes time to fine-tune your budget so that you’ve properly accounted for all of your expenses at the end of the month.

Hopefully, with these reminders, you’ll remember to include all of your monthly expenses list items in your budget. Even these often overlooked ones. Doing this will help you to achieve more financial success and help you know how to stop spending money on things you don’t need and make room for buying important things.

The post Don’t Forget These 29 Monthly Expenses In Your Budget appeared first on Clever Girl Finance.

A cash envelope system is a useful budgeting tool for anyone that needs a visual budget to stay on track. Not only will this method help ensure your spending is controlled, but it has also been shown that cash envelope budgeting may lead to spending less money!

Although the envelope money system will not work for everyone, it can be a great option for anyone that needs to see exactly where their money is going.

In this article, will dive into explaining what the cash envelope system is and how it can be used to stay on top of your budget.

What is the cash envelope system?

The cash envelope system is exactly what it sounds like. You put your cash into different envelopes based on your choice of budget categories. Next, it’s time to figure out how much will go into each cash envelope based on your spending goals.

For example, I might put $300 in the grocery budget and $150 in the fun budget. The key is that I’d only be able to use the cash from these envelopes to pay for expenses that fall under each category.

The cash envelope categories are designed to encompass your variable spending. So, you would have a groceries envelope, one for beauty, another one for household supplies and an envelope for fun. You could also try a cash envelope challenge for a fixed time period!

However, your fixed expenses such as your mortgage or car payment are not meant to be included in your cash envelope budget. You can continue to pay these fixed expenses as you normally would.

Does the cash envelope system work?

Yes, the cash envelope system works and it can transform your finances. That said, it needs to be a good fit for you. With the cash envelope system, you’ll be able to easily see how much you are spending in each category based on the cash you have on hand.

Instead of simply swiping your debit or credit card and forgetting about it, you’ll be forced to part with your cash in exchange for your purchase.

The physical action of handing over cash can make you stop to think about exactly how much you are spending in the checkout line. It is a more tangible process to spend cash as opposed to plastic funds. As you spend the money in each cash envelope, you’ll be forced to watch your cash funds dwindle.

Simply seeing where your money is going can be a transformative process. You might be less likely to overspend when you can see your cash flying out of the envelope.

For example, you might skip an impulse buy towards the end of your shopping trip because you know that you only have so much money to spend on that category before the end of the month. If you have a habit of overspending, then the cash envelope system might be a useful budgeting strategy to try.

Is the cash envelope system the same as cash stuffing?

Yes, cash stuffing is a more modern term that is used to describe the envelope system. You’ll probably come across references to cash stuffing more on social media, but it works in exactly the same way as the cash envelope wallet.

Cash stuffing refers to the part of the budgeting method where you physically withdraw money from your bank and stuff it into pre-labelled envelopes that cover your spending. You then use this cash to pay for your expenses for that month.

If you don’t fancy stuffing cash into envelopes, some people use jars, binders or any type of container to hold your money.

Who is the cash envelope system ideal for?

The cash envelope system works best for anyone that needs to visualize where their hard-earned money is going and take control of their finances.

So, should you use the cash envelope method? If you answer yes to any of the questions below, it’s definitely worth a go!

• Am I new to budgeting?
• Do I need help sticking to my monthly budget?
• Am I a person that likes to visualize things?
• Do I regularly overspend?
• Am I unaware of where my money goes each month?
• Do I want to control where my cash goes?

How to use the cash envelope system

When you first start to develop your cash envelope money system, it is important to remember that every budget is unique. You have the ability to choose your cash amounts for each category.

With that, the amount of cash you place in each envelope is a reflection of your personal values. So it will likely be different than anyone else’s. For example, I might put a large portion of my cash into my ‘hobby’ envelope while others may put a large portion of their cash into a ‘pet envelope.’

Don’t compare yourself to others because you are the person who will need to stick to the budget. Also, don’t try to restrict yourself too much at one time because you might be more likely to break your resolve.

It can feel like a complicated process for the first couple of months. But once you get the hang of it, you might find it infinitely more effective than your previous budgeting methods. The key is to stick to the plan and work out the kinks for the first couple of cycles.

If you are intrigued by the idea of cash envelope budgeting, then read on. We will show you exactly how to get started with this budgeting strategy.

1. Create your budget

The first thing you need to do is create your budget. In order to successfully use your cash envelope system, you’ll need to create a meaningful budget. If you put too much or too little cash into your envelopes, your whole financial life might go haywire.

It’s not difficult to build a budget for yourself, but it is important to understand that you’ll likely need to tweak it over time. Life changes as you grow and you’ll need to adapt to new expenses as they arise.

To start building a budget, you’ll need to track your spending. If you have no idea where your money is going each month, then you’ll need to start here.

I recommend tracking expenses by combing through bank statements and credit card statements or saving your receipts for later. It is a good idea to track your expenses for a minimum of a month. For a full picture of your variable expenses, you may want to track your expenses for three months.

In addition to tracking your expenses, you need to find out what you can actually afford to spend each month. Take a closer look at your income after taxes to ensure that you are creating a budget that you can actually afford. After determining your post-tax income, determine how much of your income needs to cover your fixed expenses such as your mortgage.

Once you’ve subtracted your fixed expenses from your post-tax income, you’ll know exactly how much money you have leftover for variable expenses. You can make envelopes to encompass each of your variable expenses.

2. Look at your spending categories

After you have tracked your spending for at least one month, it’s time to split your spending into separate cash envelope categories. This will tell you how much you have spent in each area.

A few variable cash envelope categories that you may want to include are:

• Food
• Restaurants
• Gas
• Fun
• Beauty
• Pet
• Vacations
• Clothes
• Hobby
• Miscellaneous – anything else that needs to come out of your variable outgoings

After you’ve determined how much you’ve spent in each category, make sure that you can actually afford this level of spending. It might surprise you to find out that you’ve spent more than you’ve earned in a given month.

If you’ve spent more than you’ve expected, then the cash envelope system could be the best solution for you. It will force you to think about your spending before you make the purchase.

As you move forward with the cash envelope budgeting system, think of it as a fresh start. Don’t beat yourself up over past spending mistakes. Instead, look towards the future and work towards your financial goals.

Whether you want to pay down credit card debt or build your savings, a cash budgeting system can help you to achieve those goals.

3. Set limits for all categories

Next, set spending limits for each of your cash envelope categories. Start with what you are able to spend in a given cycle, then take your previous spending into account. Base your spending limits on how much you can actually afford, not what you think you can spend or would like to spend in a given category.

When setting limits for my own budget, I found that my new spending limits seemed harsh. However, I learned that living within my means was critical to long-term financial and total well-being, so it was important to be honest with myself about this.

If you cannot stick to the spending limits, then it might be time to start thinking about a flexible side hustle to supplement your income.

4. Fill your envelopes with cash

After you’ve set your spending limits for each cycle, now comes the easy part of filling your cash envelopes. Either fill your envelopes with your next paycheck or once a month. Find a cycle that works best for you and try to stick to it. Make sure to avoid any unnecessary ATM fees while taking out cash.

Once the money is in the correct cash envelope, you’ll need to diligently spend out of the appropriate cash envelope categories. If you have extra cash at the end of a cycle, then I’d recommend rolling it into the next month or putting it into your savings.

If you are saving money, you can try out the 100-envelope challenge or the 200-envelope challenge!

5. Adjust as needed

As you continue to use the envelope money system, it is important to realize that you may need to adjust along the way. In fact, adjusting your budget along the way should be an expected part of the process. Don’t expect to nail your spending restrictions in the first month.

Some spending categories might seem overly stuffed while others are ambitiously slim. Although it is all variable spending, you should set spending caps for each category relatively close to what you need each cycle.

Throughout the process, you might uncover a bad trend or hidden spending habits that are destroying your budget. You may also find that you are more thrifty than you thought! When you are pressed against the cash restriction, you might find that you are suddenly more willing to try a DIY fix instead of throwing cash at your problems.

If you find that the cash envelope system is not working for you but the budgeting categories are helping then consider another option. You may want to switch to a ‘virtual envelope’ system instead of a cash system. Be aware of your own preferences and build a budget that will encourage you to stay on track.

Expert tip: It’s ok to repurpose your cash envelopes if you need to

It’s ok to repurpose cash from other envelopes occasionally if you’re running low in a spending area. Personally, I’ve done this several times. But only if you’re 100% sure that you’ll have enough left in the envelope that you’re taking from to cover your expenses for the month.

If you do find yourself taking cash from other envelopes, it’s a good idea to rethink how much you are allocating to that particular category and even the labels you are using.

The cash envelope system takes some time to perfect, so don’t give up straight away!

Where to find your cash envelopes

The cash envelope budgeting system is a very popular approach to getting a handle on your budget. Due to this popularity, you have many choices when it comes to carrying your cash in these envelopes. They can even make great gifts for your financially-astute friends.

Here are a few places to look: (Note –This section contains some affiliate links from brands we use & love that help us grow Clever Girl Finance! Please see our disclosures for more information.)

Plain white envelopes

Of course, you can go with the standard white envelopes. After all, if your ultimate goal is to save money then this is an affordable option. You can get 500 plain envelopes for around $20 on Amazon.

Amazon

Many Amazon sellers offer colorful envelope options to keep your budget cheerful. Our favs are these cute reusable cash envelopes for under $15 which also come with budgeting sheets.

Etsy

Etsy offers a multitude of fun cash envelope options to make sure your budget stays fun. Choose an option that suits your style.

Make them yourself

You can also make fun cash envelopes yourself, and this is my favorite idea. After picking out some fun paper from the craft store, you can fold your own envelopes and decorate to your heart’s content. Don’t be afraid to enjoy the crafting process. Plus, I find that I’m more likely to stick to the cash system if I’ve put in the effort to make my own envelopes.

Be sure to check our detailed list and review of the best cash envelope wallets.

If you are worried about how to carry your new envelopes in a fashionable way, don’t worry! You don’t have to leave these envelopes full of cash loose in your purse.

Many stores offer cash envelope wallets that will allow you to stash your envelopes in addition to your other wallet essentials. You can still have a functional wallet that offers an organized way to keep track of your cash.

As an alternative, you can also use digital cash envelopes too!

What are the pros of cash envelopes?

There are lots of different budgeting techniques out there, so it’s important to find one that works for you. The benefits of using cash envelopes are:

Take control of your spending

The cash envelope system will highlight which areas you’re overspending on, so you can easily identify what you need to cut back on. Impulse purchases are also much less likely to happen because a transaction needs to be planned to ensure you have enough cash.

Gain insights into your spending habits

Lots of people don’t actually know where their monthly income goes. If this applies to you, creating an envelope for each spending area will highlight exactly what your money is being spent on.

Flexibility

It doesn’t matter how old you are or what your financial goals are, the envelope system is a great way to budget. You can easily change your spending categories and limits in each area as your priorities change.

What are the cons of cash envelopes?

If you’re thinking about using the cash envelope method, there are some things you need to be aware of first.

It can be difficult to track family spending

If you have a family budget, it can be hard to keep an eye on where your money is going if different people are taking cash out of the envelopes. If you do decide to use cash envelopes, you’ll need to keep track of where the money from each envelope goes with a list or spreadsheet.

Holding cash carries some risk

Keeping large amounts of cash at home can leave you vulnerable to theft or loss. Likewise, withdrawing cash at an ATM and carrying it home can be risky compared to just making online purchases.

Cash won’t improve your credit score

Dealing purely in cash does have its downsides if you need to borrow money in the future. Making purchases in cash doesn’t demonstrate to lenders that you are responsible with money like having a credit card does.

How do I start using cash envelopes?

First things first, you need to make the time to set up and organize your spending categories, cash and envelopes. The best time to do this is at the end of the month, so you can get everything ready for the start of the next month.

Do this when you don’t have any other distractions and you’re positive and motivated. You need to be focused and in the right mindset to achieve the best results. 

Next, follow these steps:

1. Create your budget
2. Look at the categories of your spending
3. Set limits for each category
4. Fill your envelopes with cash
5. Adjust your envelopes as needed during the month
6. Review and reset for the next month

It may take a few months to get used to this budgeting technique, but it’s worth sticking with it if you want to take back control of your spending. As the months go by, it will become second nature and you’ll have a detailed insight into your spending habits-both good and bad!

How do you categorize cash envelopes?

Everyone will categorize their spending areas differently, and that’s ok! The most important thing is that the categories you use work for your individual spending habits and lifestyle. Start by considering what areas you spend money on each month.

Here are some suggestions for how to organize your categories effectively. You don’t need to use all of them, just pick the ones that suit you.

• Mortgage/rent
• Groceries
• Utility bills (including cell phone bills)
• Medical
• Car (payment, fuel, gas, insurance, maintenance)
• Household items (necessities such as cleaning supplies and toiletries)
• Clothing and shoes
• Children
• Pets
• Leisure and entertainment
• Hobbies
• Travel and vacations
• Gifts
• Miscellaneous (to cover anything that doesn’t fall into another category)

Before you decide on a budget for each area, I recommend writing a list of the types of things that will come under each category. You can then refer back to this at a later date if you’re not sure what category to put an item into.

What do I do with money left over in my cash envelopes?

If you find yourself with extra money in your envelopes at the end of the month, there are a few things that you can do with it.

Save it

Give your savings fund a boost and get one step closer to achieving your next goal.  Whether you’re working towards having enough funds to take a vacation or buy a new car, every little will help you smash your target.

Pay off debt

The sooner you pay off debt, the less interest you will pay over time and the more financial stability you will have. So using leftover money from your envelopes is a smart financial move.

Carry it over to next month

If you have a tight budget, putting leftover funds into next month’s envelope is a great way to keep control of your spending. This will work particularly well if you’re new to the cash envelope budgeting system and still figuring out how much money to allocate to each of your spending areas.

Treat yourself

Everyone deserves a treat now and then! Budgeting isn’t all about only spending money on essentials. It’s about being smart with your money. And if you can afford a treat, you should absolutely do it!

One of the many benefits of the cash envelope system is that it’s flexible. One month you could use spare money to pay off debt and the next month you could treat yourself. Or you could even do a combination of a few of the ideas above.

If you find yourself with spare money in your envelopes regularly it may be worth increasing your spend in some areas such as saving or debt repayments.

Articles related to cash envelopes and budgeting

If you enjoyed this article on the cash envelope system, check out this related content:

• Save $5k With The 200 Envelope Challenge!
• How To Use A Digital Envelope System
• How To Budget: Budgeting Methods And Budget Categories
• 100 Day Challenge Ideas: 11 Ideas To Reach Your Goals

Give the cash envelope system a try!

Cash envelope budgeting is an effective way to get your spending under control. If you are still struggling to stop overspending, then starting a spending journal might be the next step to kicking your spending habits.

Budgeting is a very personal choice. Although the cash envelope system isn’t right for everyone, there is a way to budget that will work for you. Consider taking our completely free course to build a budget that works for your lifestyle today.

Also, be sure to follow Clever Girl Finance on Instagram, Facebook, and YouTube for top financial tips and inspiration to achieve your money goals!

The post How To Use The Cash Envelope System To Master Your Budget appeared first on Clever Girl Finance.

If you are moving out of state, you’ll realize that the costs can add up quickly. Although any move will have some expenses to consider, it is possible to curb your moving expenses by planning ahead. Today we will share an extensive moving out of state checklist to help you cut the costs of your upcoming move.

Why use a checklist for moving out of state

When you are preparing for a move, a list can be a helpful way to make sure that everything is accomplished. With any move, many tasks will need to be done for a successful outcome. But if you want to know how to save money while moving out of state, an organized list can be even more helpful.

By preparing in advance, you can potentially avoid any surprise expenses. Plus, you’ll be able to budget in advance for these planned expenses.

Here’s a comprehensive moving out of state checklist to help you create a smooth moving process.

2 months prior to your move

While it might seem like your move is still far away, time can and will move faster and faster the closer you get to moving day! Do these things 2 months in advance to help you stay organized.

1. Visit and research your new hometown

Once you know where you are going, it is a good idea to visit your new hometown. Although a trip out of state can be expensive, the scouting mission might be well worth the cost. If you have the time to be there for a few days, you might even consider making it a vacation with a vacation budget.

Do some research, so you have a better understanding of the cost of living, crime rates, and how close you’ll be to good hospitals, schools, etc.

You’ll be able to look for a new place to live without hauling all of your belongings around with you. Of course, you can skip this step if you already know the area pretty well.

The main purpose of visiting is to determine if you like the new neighborhood you plan on moving into, what the town is like, and overall, to be sure that this is somewhere you want to live before you go through a long-distance move.

2. Contact and make decisions about schools

If you have children, you’ll need to contact the new schools in your current area and your new home. Children can transfer schools, but there will be some paperwork involved on your end.

Create a binder or get a notebook to keep track of paperwork and anything you need to do so that your kids can start school when you arrive.

3. Keep track of expenses and start budgeting

Begin listing expenses and create a moving budget in advance. That way, you’ll be ready for the costs.

As you spend money, be sure to keep track of it by saving receipts or by tracking it in your banking or budgeting app. It’s a good idea to know how much you’ve spent on your cross-country move for future reference and also to know if your move will take more money than you originally thought.

4. Take a couple of days off work to move

Moving to a new state takes some time, even if you are super organized. You should ask for time off from work in advance.

Give yourself at least 2 days off and more if you can afford to. You’ll need the day of the move off from work, and likely the next day, as well, to sort through boxes and get settled.

If driving to your new location is going to take multiple days, then you may want to request 3 or 4 days off or even a whole week.

5. Find an affordable apartment

One key feature of an affordable move is finding an affordable place to live.

In most cases, you’ll likely choose to rent in your new city before buying a house. With that, seeking out an affordable apartment should be a top priority. Check out our top tips for how to find cheap apartments.

You can start your search online with sites like Realtor.com or also Zillow.com to see prices and get an idea of what will be affordable in the area you’re moving to.

You might also choose to work with a real estate agent who can help you with the renting process.

6. Declutter your home

The more items you have to move, the more expensive your move will be.

With that, a crucial pre-moving activity is a spring cleaning of your current space.

Take the time to go through your belongings and pull out what you don’t want anymore. You might be surprised at the sheer amount of stuff you are willing to part with.

Once you have determined what you want to get rid of, try selling the items. You can sell everything from used books to coveted designer handbags. Consider a garage sale if you have enough stuff to get rid of.

As you pocket the cash from selling your stuff, save it to put towards your upcoming moving expenses. Find the best places to sell textbooks online, and also find out how to sell designer handbags for cash!

Don’t skip this task on your moving out of state checklist! It’s a double win because you’ll have less to bring with you and more money in your pocket to fund your move.

7. Hire trustworthy movers or go the DIY route

If you are moving out of state, it can be tricky without the help of movers. And it’s especially true if you have a large amount of stuff to take with you. If you are hiring movers, make sure to do your research ahead of time.

You want to work with a reliable moving company that will take care of your belongings throughout the process. Steer clear of any moving companies with bad reviews.

Although working with trustworthy and professional movers can make your life easier, the DIY moving route will save you a substantial amount of money. Rental moving trucks are more affordable and might not be too cumbersome to drive.

Of course, moving across the country will take a tremendous amount of time and effort. With that, don’t forget to include the cost of your time when making this decision.

1 month prior to your move

One month before the big move is when you’ll start to make major changes and decisions that affect your daily life.

You should take the time to handle important paperwork updates. In addition, you can begin packing.

See these next ideas on your moving out of state checklist for the month before your move!

1. Look into state residency requirements

It’s important to look into residency requirements for tax purposes, and you can also find out how long you have after moving to the state to become a resident.

Check out the rules by state for residency, and find the websites for each state where you can get more information.

2. Get insurance and registration updated

When moving to a new state, you’ll need to update all of your insurance information. It isn’t the most fun part of moving, but it’s better to get it taken care of now.

Some types of insurance that you’ll need to update include:

• Car insurance
• Home insurance (it may not take a full month to get this, but you should at least find out when the best time to change this is)
• Renters insurance (you can also transfer it)
• Health insurance

In addition, you’ll need to register your car in your new state, as well. While you will likely have time to do this after your moving date, it’s important to know what’s needed in advance and have a plan for handling this soon after you move to your new state.

Do research and write down the necessary steps.

3. Get your moving supplies for free

Instead of spending your money to pay for moving supplies like boxes, you can find these items for free. In the weeks leading up to your move, save any shipping boxes that arrive at your home.

You can also find free boxes at big-box retailers. At most stores, all you have to do is ask, and you’ll find a large supply of free boxes.

You can check out your local grocery stores and restaurants to see if they have any boxes that they’re giving away for free. Then just start collecting as many as you can.

4. Start packing any non-essentials

Begin packing up the boxes for anything that you want to take with you but don’t use regularly. Which might be books, out-of-season clothes, and some furniture.

Whatever you can live without for the next few weeks, pack it up. After all, whatever you pack now can save you time when the move is approaching.

2 weeks prior to your move

2 weeks before you move to a new state, things may start to feel hectic. But remember that you’ve already gotten a lot of things done, and there’s still plenty of time when you use the moving out of state checklist.

Do these things a couple of weeks before you move for a smooth transition to your new home:

1. Forward your mail

When you move, you have to let everyone know about your new address. Not only will you want to tell family members, but also let any creditors know ahead of time. Otherwise, you could miss an important notice or a bill that needs payment.

You can use the USPS website to get your mail forwarded. It will give you time to formally change your address and still receive your mail in the meantime.

But of course, if you can inform those that might need to contact you of your address change in advance, that’s even better.

Notify the credit card companies you have a card with, as well as any other companies that you have expenses with, like a phone bill or other expenses affected by your move.

Also, let your doctor or hospital know, and inform social security, insurance providers, the IRS, etc.

2. Pack everything that you can

Don’t leave the packing until the last minute! It can be time-consuming, so now that you’ve packed the non-essentials, start to pack anything that you can do without for a couple of weeks.

Items that fall into this category likely include paperwork, favorite books, unused electronics, and spare dishes.

3. Take care of medical needs in advance

Choose a primary care doctor in your new state, and also be sure you have access to things like prescriptions for the first few weeks after your move. If you can, get your prescriptions filled for the next couple of months.

Research a dentist, a pharmacy, and other medical professionals you need to see often.

Then, forward your medical records to new doctors if possible.

4. Transfer your utilities

You will want the utilities set up at your new place before moving in. It’s one of the most important items on your moving out of state checklist!

With that, you should set up the transfer ahead of time. That way, you’ll be able to enjoy the basics of electricity and water at your new place immediately. Other things you may need include sewer, trash, internet, and anything else you’ll need at your new home.

If you are unable to transfer services, you’ll need to cancel the utilities at your old home. Some utilities you should cancel include water, trash, and electricity, among others.

Then be sure to set up your utilities at your new home before you move in.

5. Cancel all memberships before you move

Before you leave town, take an afternoon to cancel all of your local memberships. You don’t want to be charged for a local gym membership when you no longer live in town. It’s another one you don’t want to skip on your moving out of town list.

Some examples are not just your local gym but also any magazine or newspaper subscriptions that are delivered to your home. You can also cancel any memberships for specific stores that you may no longer need to use or have nearby, like Costco.

1 week prior to your move

A week before your move, you’re down to the details. Here’s what you need to do in your last week with the moving out of state checklist.

1. Host a goodbye party or plan to say goodbye to loved ones

Your friends and family will likely want to spend time with you before your move. Planning to get together with them a week before gives you plenty of time and will keep things from feeling rushed.

Take the time to plan a get-together at someone’s home or, at the very least, meet up for coffee with friends and family before your move. There are also plenty of fun family night ideas you can try while visiting with parents and extended family before leaving.

Be sure to give them your new address and invite them to visit in the future!

2. Finish packing

Everything that you haven’t already packed can now be loaded into boxes, bags, and suitcases. Pack absolutely everything, and be sure to check every nook and cranny for forgotten items.

Pack up items in cupboards, drawers, and don’t leave anything behind. Once you finish packing, don’t forget to double-check every room.

3. Plan your meal budget

Decide how much to spend on food on the day of the move and the first couple of days after. Often, the easiest thing is to eat takeout or fast food during this time since you’ll be so busy.

If you really don’t want to spend money in this way, be prepared with pre-made meals and also plan to run to the grocery store when you arrive at your new home.

It’s helpful to make a plan for your meals in advance either way, so you know how much money to budget for this.

And while you’re thinking about budget meal planning, now is a good time to clear out the fridge. You’ll need to have it empty on the day of the move, so removing everything you don’t plan to take with you or eat before you leave is smart.

3 days prior to your move

3 days before you move, most of your paperwork should be handled, and your items will be packed. Here are the next things on the moving out of state checklist to finish up before leaving.

1. Clean your apartment or home

If you are leaving a rented space, then take the time to clean out your apartment. Without a thorough cleaning, you might not get your security deposit back.

While you are at it, check the lease to see if you need to fill in any holes left behind from your wall hangings. An inexpensive jar of wall putty can help you get hundreds of dollars back.

2. Take photos and walk through the home with your landlord

Taking photos of your old rental can help you get your deposit back, so it’s an important step to take! Be sure to get a record of damages and photos that show what day and time they were taken.

Additionally, walk your rental with the landlord to ensure you can answer their questions and that there are no problems.

If you’re moving from a home that you own, then the process is different. Though it’s probably still a good idea to take photos of any home damage just in case there is a problem in the future.

3. Ship your car

Depending on time constraints and how far you are moving, you might have to ship your car. Although you could drive it yourself, it is not always a good use of your time.

You can decide if shipping your car is worth it by getting a quote. Then weigh the transportation cost with the financial and physical costs of driving to a new state.

4. Keep your essentials available

When you are packing your bags, start by packing a suitcase of everything you need to live for a week or so. With all of your necessary toiletries close at hand, you won’t have to run to the store for items that are buried in your boxes.

It is also a good idea to pack a box of all your important paperwork to keep with you throughout the move. You’ll feel more comfortable knowing that all of your documents are in one place throughout the chaotic moving process.

Additionally, besides clothing, toiletries, and paperwork, pack another few boxes of necessities for your first week in your new home. Which might include things like the coffee maker, towels and bedding, and anything else that you’ll need right away when you move.

Day of your move

The day is finally here! Use these moving out of state checklist ideas to stay organized.

1. Stay organized with paperwork

Keep a list of all necessary numbers for the movers, utility companies, real estate agent, etc. Anyone you might need to contact for information or help with the move.

You can keep all this information in your phone or a binder and have it with you at all times.

2. Pack your meals

Either pack easy meals that are inexpensive, like sandwiches, or use money that was set aside in the budget for eating out.

If you are packing lunches and dinners, then you can do so the night before or the morning of the move.

In addition, you’ll need to have a box of kitchen essentials with you so that you can make coffee, dinner, etc., when you arrive at your new home.

You might also need a cooler to fill with ice and keep drinks and snacks cold during the day. Doing this isn’t much of a hassle if you prepare in advance, and it can save you money!

3. Keep a master to-do list

Keep a master list of everything that you need to do on moving day with you at all times. You can keep this with all the important numbers. Either on your phone or in a notebook.

The important thing is that you have a place to keep track of anything you don’t want to forget, and you can write it down to look over later. Organization will help with stress levels and also in a practical sense.

Some things you might include on your master list:

• Tip movers
• Return keys
• Don’t forget any items
• Drink water
• Walk through the new house
• Double-check with utility companies about dates

4. Do a walk-through of your new house and make note of any problems

Ideally, on the first day before you move furniture in, you should do a walk through of your new house.

Take photos of any damage or maintenance issues you notice, and make note of any problems. That way, you can see if you’re liable to fix a maintenance issue or if the old owner is.

And this is also a good idea for safety, as well. You can check that locks, windows, and doors work properly.

In addition, check smoke detectors, carbon monoxide alarms, etc., to ensure that all are functioning properly.

Doing this soon after you arrive will ensure peace of mind in your new house. Here’s a list of things to check in your new place.

The week after you move

After moving, you can finally breathe easy! Many of the most important things are done, but there are still a few to take care of so you can get settled in your new home and state.

1. Get a new driver’s license

When you move to a new state, you’ll need to update your driver’s license at the DMV.

Additionally, you’ll need to update your car’s registration if you own a car.

According to Bankrate, you’ll need to go to your local DMV, bring paperwork (check the DMV website), and then you’ll simply fill out the paperwork and take any necessary exams. There could also be a fee.

2. Update your voter registration

Don’t forget to update your voter registration! You’ll need to register in order to vote in your new state.

Depending on your opinion, this may not be a high priority, so don’t feel too rushed to get this done.

However, it’s probably something you’ll want to get done in the next couple of months.

3. Get to know the neighborhood

Meet your neighbors, walk around the neighborhood, and drive around. See what stores, parks, and restaurants are nearby. Check out any interesting places.

It’s important to do this so you can feel more grounded in your new environment.

4. Make friends and meet people

Try to introduce yourself to the people you see often, such as the people in your local coffee shop, your neighbors, and the teachers at your kid’s school. That way, you can start feeling more at home quickly.

5. Make changes to your finances

A move is a big deal and counts as one of the major life events, and your budget may be affected. Even if you planned for new or different expenses, it’s a good idea to take a look at your current budget and see if it still works.

Account for any new costs or anything that costs less than it used to. Then you’ll be on track for the next few months.

6. Change the locks at your new home

Changing the locks is the smart thing to do after a move. Even if the old homeowners turned in their keys, multiple other people could have keys to your new home, so it’s essential to get the locks changed as soon as possible.

Although you can do this yourself, the benefit of hiring a locksmith is that you know they will do it correctly. Schedule an appointment right away when you move in.

Expert tip

Although moving out of state is a big project, you can make it easier by using a moving checklist and staying organized. List out any expenses (even possible costs) for your move, so you can have a better idea of your total expenses long before you move.

Even with budgeting and making it a point to make your move inexpensive, if you find that the cost is too much, consider ways you might earn money. Try selling some unneeded items around your home, or take on a temporary side job to save up what you need.

Create a moving budget

Although the moving out of state checklist can seem long, it is important to go through each of the tasks. Otherwise, you could be skipping an important document or way to save money.

Unfortunately, the costs of moving can add up quickly. But if you look at the projected costs ahead of time, you can create a budget with budget categories for your move. With a budget in mind, you can save in advance for the expenses coming your way.

Expenses to consider for your moving checklist

Here are some expenses you should consider adding to your moving budget:

• Cost of movers (overall cost plus tip)
• Gas and car maintenance
• Meals and groceries
• Cleaning supplies
• Fees for paperwork and licenses
• Maintenance and unexpected costs for new home
• First and last month’s rent and security deposit, if needed
• Down payment if needed
• Realtor fees
• Cost of a hotel or Airbnb if you cannot immediately move into your new home
• Moving supplies
• Other expenses

Once you have an estimate of the costs for your out of state move, look for ways to save even more. Don’t be afraid to ask for help from family and friends if you need to! A little bit of creativity can go a long way when it comes to saving during a move.

What is the first step to moving out of state?

One of the first steps when moving out of state is to consider where you are moving to. If you are choosing a new state, do research and visit. If you already know where you’re moving to, consider neighborhoods you might want to live in.

In addition to this, you should make sure you secure a new job in your new state or find one that allows you to work from home with one of the high paying remote jobs.

How do I prepare to move out of state?

You can prepare to move out of state by staying organized and using lists and budgets. You should also take the time to research the new state you’re moving to so you have more information when you do move.

In addition to using lists, you should also be sure that you are mentally and emotionally prepared for your move. Take the time to meet with friends and family to say goodbye, and find ways to meet new people once you move.

What is a good budget for moving out of state?

Creating a good budget for moving out of state will depend on several factors, including whether or not you use a moving company, where you are moving to and from, and how much you need to buy when you arrive.

It’s safe to say there will be some cost involved. After creating a moving budget and listing your expenses, you’ll be able to get a general idea of how much money you’ll spend.

What to do after moving to a new state?

After moving to a new state, make sure everything on your moving checklist is done. That way, you know you didn’t forget anything.

Next, you can take a deep breath and take your time getting used to your new state, your new job, and everything else that is different.

Decorate your home, make new friends, take a class, or join a club, and use this time to try new things.

Articles related to moving out of state

If you enjoyed this article about moving out of state, check out these great reads!

• Can I Afford To Move Out On My Own?
• What Is The Cheapest Way To Move Out Of State?
• 10 Questions To Ask Before Moving In Together
• Closing A Chapter In Life And Moving On: 7 Practical Tips

Use a moving out of state checklist to save money!

Moving out of state is a big undertaking. However, with the help of our moving out of state checklist, you’ll be able to anticipate expenses and cut back where you can.

In addition, take the time to de-stress after your move and get used to your new city. Focus on both financial wellness and mental wellness by budgeting and also taking the time to practice a daily gratitude list as you get used to your new state.

The post A Checklist For Moving Out Of State Broken Out By Timeline appeared first on Clever Girl Finance.

The post 12 Tips For How To Drastically Cut Expenses To The Bone appeared first on Clever Girl Finance.

It’s happening again. It’s the end of another month, and you aren’t sure why you can make any progress on your monthly financial goals.

Maybe you overspent on a housing project or didn’t account for a last-minute expense, but your budget got blown again.

While many conventional money methods are about spreadsheets and spending apps, that doesn’t work for you. Thus, a paper and pen option like a budget binder could be the tool to unlock your financial success.

What is a budget binder?

A budget binder is a visible way to use a zero-based budgeting system. With a binder, you can see all of your money goals simultaneously while being able to tweak them as necessary.

Think of it as a day planner but for your money.

You can customize it to fit your pay schedule, weekly or monthly bills, and spending. The wonderful thing about a budget binder is that it is made to help YOU and YOUR budget.

It’s also a great way to organize your finances alongside a budget calendar. You can collect bills in real-time as they come in instead of losing them in the back of a drawer.

A budgeting binder also gives you space to save any receipts you may need in the future as well as space to utilize cash envelopes and develop sinking funds. It helps you keep your financial documents in one place and saves time too!

What can you use a budgeting binder for?

You can use a budget binder for many things, and here are some ideas.

Goal setting and tracking

Writing down your goals can increase your chances of achieving them. According to a study by Professor of Psychology Dr. Gail Matthews, participants were 47 percent more likely to achieve their goals because they wrote them down.

With a budgeting binder, you can write out a whole section for goals related to financial goals, such as saving money and paying off debt.

Consider your long-term saving goals, such as a down payment for a house or new car. Short-term saving goals could be Christmas spending or replenishing a sinking fund, like house maintenance.

With a savings tracking sheet, you can plan how much money to allocate to your savings each month. As the money increases, you note it on your sheet, thus motivating you to keep saving.

There are also trackers, just like ones that you use when paying off debt, that you can color or doodle to make it fun.

Budget binders are an easy and fun way to keep track of your progress toward your goals.

Paycheck tracking

If you’re like me, you assign different bills to different paychecks. For example, my first paycheck of the month is always designated for rent, so I know there isn’t a lot of wiggle room.

My second check of the month gives me more spending freedom. However, the challenge with a bi-weekly payment schedule is getting paid on different days each month.

However, with paycheck tracking, I can keep an eye on which bills are coming up to assign the correct amount and still hit my financial goals.

It’s easy to spend money you think you have, so giving every dollar a job is important. By tracking your income, you can nip overspending in the bud before it even happens. Therefore paycheck tracking is an essential technique to utilize.

Debt payoff tracking

No matter the amount of debt you have, it can accumulate fast. Credit card debt, student loans, car financing, medical bills, or personal loans can contribute to more debt.

No matter your debt type, you can easily track your debt, and your debt pay off with your binder. Many budget binders have sections dedicated to paying off debt, including sheets you can color in to see your progress and a payoff ledger.

Once you decide what debt payoff method to choose, paying off debt is satisfying. A whole section to see how far you’ve come could be the extra oomph you need to keep going.

Expense tracking

One of the most significant factors in getting your money on the right track is deciding to track your spending.

We often have an “idea” of what we would like to spend in each category, but we’re usually unsure. It’s hard to know if you are overspending or underspending, in any category, without knowing where your money is going.

We also fail to account for any fees we encounter, regular expenses that may increase, or old subscriptions we forgot to cancel. Tracking your expenses will help you better plan for the unexpected.

In a budget binder, you can write out your monthly budget while tracking your spending in each budgeting category.

Expense tracking can also help you determine if your spending aligns with the values and goals you have set for yourself.

Sometimes our biggest downfalls can be variable spending areas such as groceries, but this can easily be corrected with your binder.

Planning purposes

Nothing derails my budget like forgetting expenses.

For example, I once completely forgot when my car registration was due. Since I have a newer car, paying that few hundred dollars I didn’t account for was pretty painful.

Using a budget binder, I can plan better without being caught off guard.

If you want to avoid unexpected expenses, you can use a budget binder to keep track of yearly or quarterly costs. By doing so, you can plan as necessary for any upcoming events.

For instance, you can write a meal plan and track what you need to buy at the grocery store.

And you can also keep track of important financial records and login information so that someone can easily take over the household finances in case of an emergency.

Weekly and monthly check-ins

Your budget binger will allow you to manage your money weekly and monthly. The components of the binder can include worksheets that track your weekly spending. Or goal worksheets that help you outline your goals each month.

Because your binder is something you will usually use weekly and, at the very least, monthly, you’ll always understand what’s going on with your finances.

What to include in your budget binder

There are certain elements that your binder should include to ensure you use it to its potential. Here’s what to have, and remember that each component is important.

Your budget binder cover

The cover is where you can have some fun and express your creativity. Decorate the exterior of your binder with something that makes you happy. You can add a photo, cut-out pictures of the Bahamas, or even an inspirational quote.

A pretty cover page can represent who you are and what you want to achieve. In addition, it can encourage your to pick up your binder and use it.

Goals pages

Writing out your goals gives you direction and focus. Having your financial goals written out and placed where you can frequently see them will help your goals feel more obtainable.

To create a goal sheet, plan for the year and break down your goals into monthly goals.

For instance, if your goal is to create a side hustle each month, you can create goals such as updating your resume, taking an online course, or filing for an LLC.

Or you can have a new goal each month, such as a no-spend month or a don’t use your credit card month.

You can even add your personal goals for more motivation.

Expenses page

An expense sheet is one of the budget binder printables that can help you keep track of essential bills and payments.

You can see which bills require the most money by writing a list of recurring expenses such as rent, electricity, internet, gas, car payment, etc.

In addition, you can see which expenses are unnecessary and can be excluded from your budget.

Your actual budgets

Your actual budget sheet will be your place for tracking how much money you spend.

Some of your spending, such as rent/mortgage payments and car loan payments, will be fixed. Yet some costs of living, such as groceries, electricity, and gas, will fluctuate.

A budgeting sheet lets you see how much money you spend on specific areas. For example, you can see how much money you spend eating out.

If that number is too high, you can adjust your budget so you spend less money for the upcoming month.

Check-in pages for your budget binder

A budget binder isn’t just pages full of numbers. You can include pages to help you reflect on your financial decisions.

A check-in page for your expenses can have questions such as:

• What costs can I cut back on this month?
• Which subscriptions am I not utilizing, or is it unnecessary?
• How much money could I save if I eliminated certain expenses?

A check-in page for your goals could have questions such as:

• How much money did I save this month?
• What are my savings goals?
• What is preventing me from saving money?
• How can I save more money in the future?

How to create a budget binder

It doesn’t take a lot to create a budget binder. It can be as fancy or as simple as you want it to be, and that’s the real beauty of it. You’re creating something that you can stick with!

Here’s how to get started.

The binder

A three-ring binder with a clear cover would be the best one to get the job done. However, it’s crucial that you choose a binder size that will accommodate your lifestyle and your printouts.

I highly recommend a two-inch binder since it will go through a lot.

Remember, you can personalize the front with an insert or make one yourself.

Fun colored pens

I love writing different areas of my budget with different colored pens. It’s an easy way to keep categories separate and see how much I have going out at any given time.

One way I use my colored pencil is by using vibrant colors for the expense I need to pay attention to. For instance, I may highlight my rent, insurance, and electricity bills in red.

I also use more natural colors like browns and dark greens for categories that include money for nonessential spending. By color coding categories, I train my mind to prioritize different expenses.

Color coding also makes budgeting more fun.

Whiteout & paper clips

You’re bound to make a few mistakes here and there, so having a whiteout can be handy.

Paper clips are helpful so that you can attach any documents or receipts to your binder. Clipping together receipts can be beneficial when calculating your total spending. Or perhaps you clip a rebate you’ve meant to mail to get some money back.

Plastic pocket dividers

Dividers are an easy way to separate different areas in your binder. With pocket dividers, you can insert any recipes or bills you need to add to your tracker or keep on hand.

Storing receipts in your binder can help you better understand exactly where you’re spending is going. For instance, when you review your grocery receipt, did you use all the groceries you bought?

Pocket dividers will also make locating a different section in your binder easier. For instance, you can immediately flip to your budget section without flipping through the whole binder.

Envelopes

Envelopes are an easy way to stack cash for future purchases, goals, or sinking funds.

You can invest in cute and colorful envelopes or purchase simple ones from the dollar store. Envelopes can also help you with your budgeting. For instance, you can have envelopes allocated to different expenses.

Alternatively, you could use digital cash envelopes!

Download your free budget binder printables

No budget binder is complete without the printable templates! There are many FREE budget binder printables that you can use to build out your binder.

The essential printables include budget sheets, a tracking sheet, and budget worksheets. Once you get comfortable using the printables, you can also add more.

 

Manage your money better with a budget binder!

There are so many different apps and methods for managing your money. And although technical means can be efficient, there’s no reason money management can’t be fun and effective.

A budget binder is excellent for people who are visual learners, creatives, or anyone who wants to try something new.

When starting, be sure to set yourself up for success. Gather the correct materials, such as the right size binder, colored pencils or highlights, envelopes, and dividers.

Don’t overlook decorating the cover. Once you have the structure of your binder in place, be sure to add your printables, such as your expenses sheet, your actual budget, and your money worksheets.

A budget binder can be the key to managing your money and achieving your financial goals

The post How To Create A Budget Binder + A Free Budget Binder Printables appeared first on Clever Girl Finance.

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A budget is a critical piece of any successful financial picture. Without a budget, it is hard to know where you stand financially. Even if you have a healthy emergency fund, a budget will allow you to track how much money you are earning, saving, and investing every single month.

You’ll need a budget tracking template to help you manage the details of your budget. It would be physically impossible to remember every single detail of your budget.

Without a helpful spreadsheet to hold all of the important information, you might find that you are missing out on crucial details.

Luckily, there are many great budgeting tools available. We will cover the best budget templates and apps.

What is a budget template?

A budget template will help you manage your budget by tracking all of the minor details. You’ll be able to customize the spreadsheet to meet your budget specifications. For example, if you budget biweekly.

On a monthly basis, it can let you know how much you have left to spend. You’ll be able to stay on budget without constantly running through your checking account transactions.

I’ve found that it allows me to track patterns in my spending. Additionally, I’ve noticed that some times of the year are more expensive than others. With that information, I’ve been able to better plan for my future, so templates for budgeting are extremely important.

10 Best budget templates and apps

So, what are the best budget templates? Let’s take a closer look at my favorite options.

1. Clever Girl Finance Free Budget Template

Clever Girl Finance offers free budget templates in both printable and spreadsheet versions, that can help you set up a budget and track it over time. The comprehensive worksheets will walk you through each category in your budget.

First, you’ll work through setting up your spending goals for the budget categories. You’ll need to think of a wide variety of categories from debts to groceries and everything in between.

You’ll have the space to track your income from multiple income streams. Plus take notes about your spending patterns over time. If you see something that you’d like to change in your budget, then you can adjust for the next month.

The worksheets have several questions that will force you to think about potential ways to cut back on your expenses or increase your income.

Click here to download this free budget tracking template (and more)! From there, you can start working on building your budget today!

Be sure to pick up a copy of the book, Clever Girl Finance: Ditch Debt, Save Money, and Build Real Wealth and the rest of the Clever Girl Finance book series!

2. Google Sheets Budgeting Templates

You may have wondered, “Does Google Sheets have a budget template?” Yes, Google Sheets does have free budget templates that you can use for money management.

If you are a very data-inclined person, then using a Google Sheet budget template could be a good solution. You will need to enter all of your spending data by hand.

That might involve saving receipts each month or checking through your bank statements if you mostly spend with a plastic card.

Overall, using a Google Sheet budget template is not a very visual way to track your budgeting progress. However, the numbers don’t lie. You will be able to see what you are spending and make plans to adjust that spending.

Although entering the data can be time-consuming, it can help you truly understand your spending patterns. You’ll be forced to relive every purchase as you enter them into your budget spreadsheet.

You can find the official Google Sheets Budget template here. It is fairly basic, but it does allow you to track your spending each month.

If you are interested in using this sheet, you’ll need to make a copy of the sheet after requesting access to the sheet. After making a copy, you’ll be able to make edits and track your budget in your own account.

So does Google sheets have a budget template, yes, but if you don’t like the free budgeting templates, then you can customize your own Google Sheets file.

3. Microsoft Excel Budget Template

Excel offers budgeting templates that are very similar to Google Sheets. However, you might need to pay for them. If you don’t already have Microsoft 365, then Excel will require you to pay for their budgeting templates.

Like Google Sheets, the template requires you to fill in the data in a hands-on way. It might take some time to get used to the format. But it can be a good way to think through where your money is going each month.

If you want to use Excel but don’t want to pay for its premium version, then consider building your own spreadsheet. Personally, I use an Excel sheet that I built myself to track our budget.

Each month I write down our purchases and determine how much we’ve gone over or under budget for the month. It can be a great free option if you are handy with Excel.

4. Personal Capital (App)

Personal Capital can help you track your long-term financial goals. Where Personal Capital shines is as a net worth tracker.

Although it does offer some budgeting assistance, the platform is focused on your net worth. The goal is to help track and manage your investments over time.

If you choose to use Personal Capital, then it might be useful as a general budgeting helper. It can show you how much your savings have grown each month. That will give you an idea of whether or not you stuck to your budgeting goals.

5. Credit Karma’s money management tool

Credit Karma offers you the opportunity to check your credit score on the go. And the best part is that it is completely free!

The website features resources like a mobile app, loan and credit card information, and more.

6. You Need A Budget (App)

The mission of You Need A Budget, or YNAB is to give every single dollar a job. The budget you create will have you allocate every last dollar to a category. You’ll be able to choose different budget categories including savings for each and every one of your dollars.

The YNAB app takes the difficult parts out of budgeting. In fact, it is one of the best budgeting apps available.

The software will track all of your spending so that you don’t have to add it to a spreadsheet. Instead, you’ll be able to send and receive updates from your YNAB app about your budget.

If you are starting from scratch and prefer a mobile method, then YNAB is a great solution to help you develop a budget. You can try it for free for 34 days. After that, you’ll pay a small monthly fee for the service.

7. EveryDollar (App)

EveryDollar is another monthly budgeting app that can help you stay on track. You’ll be able to build your first budget in less than 10 minutes and track it throughout the month.

I’ve noticed the format of the app is extremely simple, but it will get the job done. Although there are no bells and whistles, I still think the app can help you manage your budget effectively.

8. Vertex42 budget spreadsheets

The Vertex42 website offers multiple spreadsheets to help you with your finances, including personal budgeting templates, a monthly budget sheet, and more.

The personal budget spreadsheet is available to download in Excel or google sheets. It includes categories like health insurance, car payment, and charity.

So you can keep track of your entire family budget and home expenses all in one place. The website offers some of the best budget templates out there.

9. Pocket Guard (App)

The Pocket Guard app is known for helping people to keep their spending in check. It keeps track of spending in list and pie chart form.

In addition, this budgeting tool offers different categories for budgeting and allows you to see how much money you still have after paying your bills.

10. Simplifi by Quicken (App)

The Simplifi app is trusted by many like Forbes and USA Today. The app gives you a place to track your savings goals, as well as a way to see your spending over the course of several months.

It’s the easiest way to stay on top of your finances, and you can try it for free, though there’s a monthly fee after 30 days.

It gives a great overview of spending and it will even send you alerts on your phone for your money. In addition, it offers insights into your investments by keeping everything organized in one place. See your expense categories, in addition to actual costs, and learn to track expenses in a simple way.

Expert tip: Find a budget template that works for you

Leveraging a budgeting template or all can greatly simplify your approach to budget. It can also save you a significant amount of time. The key is to find a template that fits into your lifestyle. I recommend testing out a few different templates to determine which format would be the best fit for you.

Should you use a budget template or app?

Now you’ve gone from wondering “Does Google Sheets have a budget template?” to understanding your various options for spreadsheets from Excel and Vertex42, and the ever-popular money apps.

Yes, you should absolutely use a budgeting template or app to manage your money. Unless you already have your budget under control, a budget tracking template is essential for learning your spending habits and becoming great at money management.

Whether you prefer the best budget templates as a spreadsheet or app, you’ll be able to better visualize where your money is going.

That can lead to more intentionality with your money. And while there are paid options, you can also find free budget templates to avoid overspending.

Is there an Excel template for budgeting?

Yes, Excel offers several templates for budgets that you can customize for your needs. You can get Excel budget templates for free directly from Microsoft.

The platform Vertex also offers some great free Excel budget templates.

If you are looking for something more in-depth, you can purchase templates by doing a quick search on platforms like Etsy.

Related posts on budgeting

If you have enjoyed this article on best budget templates, check out our related content:

• The 50-30-20 Rule: How It Works + A 50 30 20 Budget Template
• How To Make A Budget Calendar Work For You
• How To Budget By Paycheck: Key Tips For Success
• Zero Based Budgeting 101 + The Best Zero Based Budget Templates
• How To Create A Biweekly Budget In 5 Simple Steps

Leverage these templates for budgeting to manage your money better!

A budgeting spreadsheet or app is a great place to start managing your budget. And having access to the best budget templates can help you get your finances to a better place. However, it might not be enough to help you build a budget that works for you.

If you need more help designing a budget that works for you, then consider taking our completely free budgeting course! You’ll learn about the different budgeting methods and choose the best option for your lifestyle.

Move forward with these templates for budgeting today. You absolutely will not regret it!

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An 18th birthday is a special occasion. It’s actually one of the big birthday milestones in adulthood. So you are probably trying to brainstorm 18th birthday ideas for yourself, or maybe even a child or friend.

If it is your big day everything will soon change. Whether you plan to go to a university, begin a career, or take off to travel the world. Since it’s a milestone, you’ll want to celebrate with family and friends in style.

This article contains affiliate links that help us grow Clever Girl Finance! Please see our disclosures for more information.

We rounded up some great ideas of what to do for your 18th birthday to make your party the event of the year! But before we dive into what to do for an 18th birthday, let’s discuss some interesting birthday world traditions first!

18th Birthday traditions around the world

So birthdays have evolved a lot over the years, and there are many traditions observed around the world. For example, according to Aimee Hansen of Gifter, “fairy bread” is the traditional birthday food for children in Australia.

However, in Jamaica, you’ll get flour thrown at you for your birthday. While birthday traditions vary across the world, you can be sure that there’s always a way to celebrate.

For an 18th birthday in the Philippines, there are special traditions. For instance, there is an 18th birthday celebration for girls called a debut. It’s an extremely fancy party featuring food, presents, toasts, and more.

In the USA, an 18th birthday is thought of as a milestone and many choose to celebrate in style with a big party. In the UK, you are legally an adult when you turn 18.

So whatever culture or tradition you decide to embrace, there are many unique 18th birthday party ideas you can do. That being said, let’s dive into our epic list of what to do for your 18th birthday.

18th Birthday ideas: What to do for your 18th birthday!

So the big question is, what are the best 18th birthday celebration ideas? Where should you go and what type of activities should you do? Whether you enjoy the great outdoors or need some pampering, this list will help you decide what to do on your big day.

Here is the list of our favorite 18th birthday celebration ideas!

1. Have a spa day

This is a traditional way to celebrate with a group of friends on your birthday. So get everyone together and head to the spa for manicures, massages, and facials.

Or, if you’re on a budget, opt to stay in for an at-home spa day. For example, you could paint each other’s nails, apply face masks, and watch some good movies! Even if you are on a budget, there are plenty of fantastic ways to pamper yourself on your big day.

2. Go hiking

So are you wondering what to do for an 18th birthday that’s outdoorsy? If you enjoy being out in nature, try going hiking for the day.

This is a great way to get out in nature while spending quality time with friends without the distraction of phones or technology. Choose a setting like a lake or a mountain, and have fun!

3. Enjoy a luxury picnic

This is one of the more unique 18th birthday party ideas and an excellent way to celebrate your day while also being outdoors.

Luxury picnic companies will usually set up beautiful decor in an outdoor setting and bring food. So all you have to do is just show up with your friends and family, ready to make some memories and enjoy a meal.

A luxury picnic is one of our favorite 18th birthday celebration ideas because you get to enjoy good food and relax with friends and family.

4. Head to the bowling alley

So how long has it been since you hit the ole’ bowling alley? This is a great activity if you’re wondering what to do for your 18th birthday. There’s food, music, and fun.

You can even let them know it’s your birthday while at the bowling alley to see if they do anything special for birthday visitors, like song dedications.

5. Have a movie night marathon

So there are a few ways to do this. For instance, you could pick out a few favorite films and watch them at home or at a friend’s house.

If you want to do something retro, head over to a drive-in theater. Don’t forget the popcorn!

6. Take an 18th birthday celebration weekend trip

You should consider taking a weekend trip because it could be a fun and unforgettable experience. However, it’s one of the more extravagant 18th birthday celebration ideas. so you will need to plan ahead.

If there’s a big city nearby, you can plan to drive out and enjoy all the city activities for a couple of days. Or you can even hop on a plane and visit a destination (e.g. Disney!) you’ve been wanting to check out.

7. Treat yourself to old fashioned cake and ice cream at home

There’s something nice about getting together with family and friends in a simple way and just enjoying the day. So grab your go-to ice cream, bake a cake, and invite your favorite people to join you.

According to National Day Calendar, some of the most loved cake flavors are chocolate and cheesecake. You might also consider cupcakes or ice cream cake.

8. Host a video game party

If you’re into video games, why not host a marathon? Be sure to also include snacks and a birthday cake along with your favorite game. You can pick a new one or try a game that’s really old school just for fun.

9. Try an escape room

So these are very fun and great for large or small groups. Take a few people with you and try out an escape room. Solve the mystery before time runs out! Then be sure to get some ice cream and cake afterward.

10. Take a creative class

Are you the creative type? If so then grab a couple of close friends and try out an art class. Maybe make a coffee mug in a pottery class or even some jewelry.

It’s a unique way to celebrate, and you’ll create something to help you remember the moment. You can also get together at home and find classes on sites such as YouTube or Yaymaker. Who knows, maybe you will turn it into a new hobby!

11. Ride ATVs

Looking for adventure? Why not ride ATVs with friends or family? You get to be outdoors and enjoy some fresh air while also doing something fun.

They’ll love it, and it’s a cool idea that most people won’t think of for celebrating a birthday. So it’s definitely one of the more unique 18th birthday party ideas!

12. Play a game of paintball

If you love a great game, try paintball. It’s one of the best 18th birthday ideas because not only is it unique, but you get to have a fun and memorable experience.

Side note: You can sometimes rent out a whole place if you have a large enough group. So grab your friends and family and have some fun.

13. Have an old fashioned game night

Want to try out a throwback party? Enjoy an old-fashioned game night. Break out the board games like Uno, Clue, and Monopoly, or try poker. Be sure to also include prizes for the winners.

14. Tour the town for tasty treats

If you can’t decide on just one place to celebrate, why not have your party in more than one location? For example, dinner at one restaurant, and dessert at another. It’s a great way to fill up the night while experiencing your favorite treats.

15. Try an 18th birthday theme party

There are many ways to have a themed party, and yours could be one of the most unique 18th birthday party ideas. You could do a costume party, a beach party, a disco-themed event, a mystery dinner, or whatever 18th birthday party theme you want. All great ideas for Instagram photos too!

So put on your thinking cap birthday girl and get creative for a fun and festive event!

16. Go on a scavenger hunt

There are tons of fun ideas for indoor and outdoor scavenger hunts. For instance, there are nature scavenger hunts or even neighborhood scavenger hunts. So embrace your adventurous side and make a go of it!

17. Invite your friends to a fancy restaurant

Heading out to a fancy restaurant is one of the simplest yet fun 18th birthday ideas. Just a good night of delicious food, and great conversation with your closest friends. Sometimes it’s the simple things that are the most pleasurable!

18. Have a sleepover

Remember how much fun it was to have your friends sleepover when you were a kid? So why not get in touch with your childish side and have a pajama party!

You could really make it fun and find some vintage board games or movies to watch or even have a fun photoshoot. This is one of the best 18th birthday celebration ideas to enjoy with your friends because it makes you feel like a kid again!

Expert tip

When it comes celebrating your 18th birthday, having a plan in advance is key. A plan will help you explore your top ideas, plan your spending, and ensure there are no last minute suprises. A great way to lay out your plan is with a spreadsheet.

Gift ideas to ask for on your 18th birthday

Have you been given the opportunity to get a gift for your 18th birthday? Not sure what gift to ask for? We’ve got some great 18th birthday present ideas. These suggestions are perfect for anyone because they range from jewelry to cash!

1. Jewelry

This is always a winner because let’s face it most of us love jewelry. For an 18th birthday, try something meaningful. A beautiful, high-quality watch, for example. A nice necklace set, or maybe a bracelet with an engraving. Think of something classic and pretty that can be worn for many years.

2. Money

Money is always a good idea if you don’t know what to do for an 18th birthday gift. You know it’s useful, and you can buy whatever you want. You can save or invest this money as you head into your 20s!

So if you’d like to fund your savings account instead of getting stuff, ask for cold hard cash!

3. Gift card

A gift card is an awesome 18th birthday gift idea because you can have a shopping spree and buy what you want. Think about your favorite shops or things you enjoy. Then choose a gift card to a coffee shop, restaurant, towards a trip, or even to buy stock!

4. Dorm room decor

If you’ll be heading off to college soon, some dorm room decor might be a great gift to get. Things like a memo board, string lights, or wall art will brighten up the space. It’s easy to buy and will get you excited about going to college.

5. Great book

A great book is always a great idea. Since this is for your 18th birthday celebration, choose something that fits the occasion. Maybe an inspiring memoir, a career guide, or a financial book. Reading is enjoyable and beneficial!

6. A musical instrument

So if you love music and are musically included, you could ask for a musical instrument as a gift. Maybe you want to learn the piano, guitar, or even the drums. Now might be a great time to get started!

7. Games

Games are something that everyone likes to have around. Try a fancy chess set, a great deck of cards, or even a fun group board game you can play with many people. It’s a nice way to connect with friends and family, and it will provide tons of entertainment.

8. Luggage

If you are the adventurous type, luggage is a great gift. You can use it when you travel, head off to college, or take a weekend trip. It’s a super practical present that’s also fun.

9. Gel nail kit

So if you love manicures, you can ask for your own gel nail set. There are a lot of great nail kits available, and many come with nail colors, too. Plus, it saves money over time.

10. Coffee maker or espresso machine

This is especially useful if you are going to be spending a lot of time studying or working in the future. You’ll appreciate having a way to make your own coffee or espresso from the comfort of your home, and it can save you money.

In fact, let’s say you spend an average of $15 a week on grabbing coffee out. That’s $780 in just a year you could save! So ask for a coffee maker and some delicious gourmet coffee and save some serious cash.

11. Laptop or tablet

This is a great group gift, especially if you will be going off to college soon. A laptop or tablet can be super helpful and make it easy to take notes and get assignments done.

Since it’s a higher-priced item, you can tell your friends they can all chip in on one gift instead of getting you separate gifts.

12. A Fitbit

A fitbit is a fun way to stay in shape, and they’re a great present if you are turning 18. You can use it to count steps and stay fit while at college or when working. It’s also a great way to hold yourself accountable to achieve your step goal for the day!

13. Photo album

A great place to keep memories! Go the extra mile by adding photos from the party or pictures of you and your friends and family. That way, you can look back on all the good times you had.

14. Camera

If you love taking pictures, a camera can be one of the best 18th birthday ideas. A high-quality camera to record your adventures is the perfect thing, especially if you’ll be going somewhere new. You could also use it to take pictures and start your very own blog if you wanted to!

15. A designer handbag (The ultimate 18th birthday idea for a gift!)

A good-quality designer handbag is a staple for every woman’s closet and the perfect thing to buy for an 18th birthday party. Find something with a classic design and a neutral color that goes with everything in your wardrobe.

You could also let your friends know you don’t mind getting a pre-owned designer bag. This will help save them money while you still get a fabulous gift. Plus, shopping second-hand is also good for the environment!

Fast and fabulous 18th birthday ideas for decor

Are you struggling with ideas for decorations? No problem! Check out these fast and simple solutions for 18th birthday ideas.

1. Banners

These are easy to find, and you can use them to decorate easily because they make a big statement. Find one that matches the birthday party colors. You can choose from signs that say things like “Happy 18th!” or “Party” or anything else you like.

2. Balloons

Of course, we have to include balloons in our list of 18th birthday decorations! Balloons are easy and inexpensive, and you can decorate a room with them quickly.

There are all types of balloons, from fancy ones to arches to dollar store ones. So choose something that fits your budget.

3. Table centerpieces

You can do anything here, from making your own to finding something with the number “18” on it. A table centerpiece should be visible, large enough to be the central part of a table, and go with the colors for the party.

4. Online invitations or paper ones

There’s something about getting an old-fashioned invitation in the mail that is really fun. But if you want to be environmentally conscious, you can buy Evites to send via email. This is also great for getting fast R.S.V.P.s from people.

5. Party favors

You’ll need some great party favors to celebrate in style and thank guests for being part of the day. Try candles, gift cards, or something that is part of the event theme. For example, sand in bottles for a day at the beach or a favorite DVD from a movie day.

6. Thank you notes

Thank you; notes are a nice touch and a great way to let your friends and family know you appreciate them. Just write something simple, thanking them for being part of your day and sharing a note about a fun memory.

7. Tablecloths

If you’re having dinner or a dessert table, use a tablecloth. Try using a heavier cloth rather than a plastic one. It adds a touch of elegance. Pick one in a color that compliments the primary color for the party.

8. Photobooth or background

Another great idea is to create a space for people to take photos! You can make a background with streamers and balloons or make a photo booth if you feel creative.

Include props like hats or sunglasses for people to wear. It’s one of the most fun 18th birthday party ideas.

9. Streamers

Crepe streamers are fun and inexpensive, and you can use them to decorate any space. Wrap them around porch posts or balconies, or use them to make a photo background.

Make sure the color matches the theme. Remember to check out stores like the Dollar Store or Big Lots for cheap decor.

10. Candles

Candles are great if the event will be in the evening or at night. Use candles to quickly decorate the space. However, if you’re concerned about fire hazards, you can use battery-operated ones for safety.

They are still beautiful, and you don’t have to worry about accidents!

11. Hanging lights

These are nice to have for an outdoor celebration, especially in the late afternoon or evening. Use them to decorate trees, a backyard, a porch, etc. They look pretty, and they don’t require a lot of effort.

12. Flowers or plants

Any table or event space can benefit from greenery. So add a few plants or some beautiful flowers to the main table. It’s a sophisticated look that is perfect for a birthday party.

13. Canopies or tents for outdoors

Suppose you are celebrating your party in a backyard, at the beach, or anywhere outside. In that case, a pretty canopy or tent will make the decor come together. Include lights, lanterns, and balloons to make the look complete.

Plus, it’s also a great idea just in case the weather switches on you.

14. Dishware

Using dishware is a fancy way to celebrate. Use porcelain, glass, or china dishware when serving dinner. That way, you can prepare a meal for your guests in style. Paired with a tablecloth and some flowers, this is an elegant look.

15. Glass vases or table decorations

So if you are unsure how to decorate a table, you can’t go wrong with some glass vases. You can fill them with candles, pretty rocks, or flowers.

They always look nice and are inexpensive to buy. In addition, you can buy confetti or glitter to sprinkle on the table for a bit of glam.

What are themed 18th birthdays?

A themed 18th birthday is where you decide on a party idea including outfits, look and feel. For instance, you could do a Disney theme, a beach theme, an all-white theme, or a dress-up gala theme.

You could even do a theme after a classic movie like Clueless or Breakfast at Tiffany’s, and much more. Themes are a great way to add uniqueness to your special celebration!

What is the best thing to do on your 18th birthday?

The best thing to do on your 18th birthday is something you will enjoy and can create beautiful memories from! There’s no rule about what you have to do for your birthday, instead do something you love with people you love!

What can I do for my 18th birthday without friends?

If you don’t have any friends around on your 18th birthday, there are still a ton of things you can do alone to celebrate! For instance, you go could for a spa day, where you get your hair and nails done. Or perhaps a massage and facial. You could sign up for a creative and fun class and spend the day with other class goers!

You could also take yourself out on a solo lunch or dinner date and let the servers at the restaurant know you are celebrating a birthday!

How to budget for your 18th birthday ideas

All these 18th birthday ideas vary as far as cost. But any idea works better with a budget. If you don’t know where to start, check out these helpful tips.

1. Create a party budget

The very first thing you need to do is create a party budget. How much do you plan on spending? That’s why it’s good to choose what you want to do and research the estimated costs.

So, make a list of costs based on the activities, food, and decorations. Then figure out your total so you know how much you need to save for the event. For instance, let’s say the total estimated amount for your party is $500. Now you know how much you need to save to stick with your party budget!

2. Open a dedicated savings account

When saving up for something important, it’s a good idea to give your money a specific place to grow. You should open up an account specifically for birthday savings.

That way, you can add to it each month and see the amount grow larger with time. It’s usually easy to name your account, too. Naming it something like “18th birthday celebration” will help keep you focused.

3. Save your pocket money

If you regularly get an allowance or have some money from other birthdays or holidays, save it up for the party. Even though pocket money may seem like a small amount, a bit of cash over time can add up to be quite a lot by the time you need it—especially if you save for several months or maybe even a whole year.

4. Earn extra money for your party

Getting a job is one of the fastest and most steady ways to save up some money. If you already have a part-time job, that’s great. You can start saving your money for your 18th birthday.

If you don’t have a part-time job, but you have some time before the event, such as several months, start applying. You may also consider a side hustle doing something like dog walking and save up that way.

We’ve also got some great ideas for high paying jobs for 18 year olds!

Related posts on party planning and events

If you enjoyed this article on 18th birthday ideas, then check out our related content:

• 40th Birthday Party Ideas On A Budget
• 22 Fun And Inexpensive Ideas For Days Out With The Girls
• 49 Family Night Ideas On A Budget
• 40 Things To Do For Free With Friends

Make the most of these 18th birthday ideas for an amazing celebration!

So now you have great ideas for what to do for an 18th birthday! Your 18th birthday party is a time that will never come again. There are many ways to celebrate it, but the most important thing is to spend it with friends and family.

Since you may soon be heading off to a new town or state, enjoy this time with those you love. Remember to create your birthday budget, so you don’t derail your financial goals too!

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