![]() ![]() It’s not necessary to be exact, down to the penny. Sure, you may not capture every last expense doing it this way, but it’s 85% of the way there, which is good enough for now. The easiest way to get an idea of what you’ve spent where is to look at your credit card and banking statements. Limit this to the past couple of months to keep things simple. Look at your past spending and fill in all the average monthly dollar amounts for each category. To do this, you’re going to have to dive a little deeper. ![]() Fill in the costs and categories you haven’t yet accounted for.Fill in the dollar amounts you know offhand.Let’s walk through this step by step using the Conscious Spending Plan tab: Remember, the goal is a back-of-the-napkin plan here. Use the 85% solution instead (go for good enough, not perfect). They come up with 60 categories, then they have to maintain it and be ultra precise. IMPORTANT: The biggest mistake people make is OVER-COMPLICATING this. We’re talking only about bills and other fixed costs here.With your Conscious Spending Plan, we’re only working with take-home pay. I also didn’t include taxes (you can search for “IRS withholding calculator” to double-check the amount of taxes your employer “withholds” from each paycheck to pay your taxes).I didn’t include “dining out” or “entertainment,” as those come out of the guilt-free spending category.At the end of the year, if I haven’t spent my “stupid mistakes” money, I save half and I spend the other half.) That changed things quickly, and I currently save $200/month for unexpected expenses. Then, within two months, I had to go to the doctor for $600 and I got a traffic ticket for more than $100. One category I recommend is “stupid mistakes” or “unexpected expenses.” (When I first started, I saved $20/month for unexpected expenses. For example, maybe you don’t have debt to pay off, but you do have monthly expenses for your pets. If you see any glaring omissions of your major spending categories, add them. To find the answer, let’s walk through this step by step. ![]() ![]() You’d think it would be easy to figure this out, right? Ha! It turns out this is one of the toughest questions in personal finance. Before you can do anything else, you’ve got to figure out how much these add up to. A good rule of thumb is that fixed costs should be 50% to 60% of your take-home pay. Step 3: Calculate your fixed costsįixed costs are the amounts you must pay, like your rent/mortgage, utilities, cell phone, and student loans. Now, let’s break down how to come up with your numbers for each category. Your spending doesn’t have to match these exactly, but I would be cautious about straying too far from these percentages. The percentages for each category outlined above are my recommended guidelines. With this in mind a weekly budget enables you to be a flexible.Vacations, gifts, house down payment, emergency fund, etc.ĭining out, drinks, movies, clothes, shoes, etc. It may be hard to maintain and stick to the budget since there are emerging issues that may you spend on that you had not budgeted. You can use a week’s budget with the apps provide to make your yearly projections. By starting with a weekly budget, you can train yourself to follow it and if it you are able to stick to it, then you can advance to a Monthly Budget. When you start following a sample budget either at home in business, not everyone gets on board and the only way to get them is to start small, with time you can upgrade from a weekly to monthly budget. It’s easier to change a weekly budget than a yearly budget. This is done by limiting your expenditure budget to the level of income and making provisions for savings. The budget helps you control what you are making or earning. With a weekly budget, it’s easier to change and update emerging issues such as extra incomes or unexpected costs. It helps you manage the expenses on a more flexible level. ![]()
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