Tip of the Week
Consider using the 50-30-20 budget to help you balance what you owe each month with saving goals.
- Determine what your take-home pay is each month; this is the amount that you have after taxes. (It’s also called “net pay.”)
- List your fixed expenses and variable expenses.
- Allocate 50% of your take-home pay to fixed expenses.
- Aim to spend no more than 30% of your pay on variable expenses.
- Save at least 20% of your take-home pay each month to build an emergency fund and to invest.
What are fixed expenses?
Fixed expenses are costs you have to pay each month, and they usually stay pretty much the same on an ongoing basis. Examples include your rent or mortgage, student loans, health insurance premiums, and car payments.
What are variable expenses?
Variable expenses are monthly costs that are flexible. These can include what you pay for food, clothing, and entertainment. You can always reduce what you pay for variable costs if you need to spend more in other parts of your budget.
Good to know: You can always reduce your variable expenses if you want to save more money, or if you’re having trouble keeping your fixed costs at 50%.
Learn more about budgeting
This special budgeting guide will teach you all about budgets, and will show you why they’re an essential blueprint for saving, spending, and investing.
The Easiest Budget You’ll Ever Make
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Budgeting for Single Millennials: A Step-by-Step Guide
If you’re a millennial, you probably have more debt than previous generations. This budgeting guide can help you get your financial life together—including saving for big things, like cars and weddings.
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Think before buying, and consider using cash over credit.
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Try to Avoid Using Retirement Savings for Debt
Consider other options, like getting a side gig, and cutting down flexible expenses.
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