Budgeting Tips - Money Management

Simple tip how to divide your monthly income. See how much to spend on needs, wants and savings. For better financial planning.

Calculate your budget

Enter your monthly income to see how much you should allocate to needs, wants, and savings.

Category	Spend on
Needs (50%)	Rent/mortgage, groceries, utilities, insurance, minimum debt payments, transportation
Wants (30%)	Dining out, entertainment, hobbies, subscriptions, travel, non-essential shopping
Savings/Debt (20%)	Emergency fund, retirement accounts, investments, extra debt payments

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Frequently Asked Questions

Find the answers to the most frequently asked questions below. If your question isn't here, or you need more info, or have feedback, please reach out.

What is a good budget rule?

The 50/30/20 budget rule is a good money management strategy that divides your income into three categories: 50% for needs (housing, food, utilities), 30% for wants (entertainment, dining out), and 20% for savings and debt repayment. It provides a balanced approach to spending and saving without requiring detailed tracking.

How do I know what counts as a need versus a want?

Needs are essential expenses required for basic living: housing, groceries, utilities, insurance, minimum debt payments, and basic transportation. Wants are non-essential expenses that improve your life but aren't required: dining out, entertainment subscriptions, vacations, and hobby expenses.

What if my necessary expenses exceed 50% of my income?

If your necessary expenses exceed 50% of your income, you may need to make adjustments. Consider finding ways to reduce housing costs, transportation expenses, or food costs. Alternatively, look for opportunities to increase your income through side jobs, asking for a raise, or developing new skills.

Should I pay off debt or save money first?

Generally, prioritize building a small emergency fund (around 1000 in your currency) first, then focus on high-interest debt (like credit cards). Once high-interest debt is paid off, build your emergency fund to cover 3-6 months of expenses, then balance between lower-interest debt repayment and long-term savings.

How can I track my spending?

Start by calculating your after-tax income and the dollar amounts for each category. Track your spending for a month, categorizing each expense as a need, want, or savings/debt payment. Review your spending at month-end to see if you stayed within the guidelines. Adjust as needed for the following month.

You can track your spending using a budgeting app or simply in a spreadsheet.

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