Budgeting. UGH. One of my least favorite words in the English language. I’m the kind of person who will hear a great tip to save money, try it out, and miserably fail 3-4 days later. This has been my battle with budgeting for as long as I can remember. As a twenty-something living truly on my own for the first time in my life, budgeting was a harsh reality I had to face. Whether you’re wondering if you can meet rent next month or spending without a care, it’s SO important to budget in this time of our lives. My friend Lauren Byrne outlines this perfectly in her post about the 20-30-50 budget. This post changed my life — no seriously, it did. Ever since I put her methods into action, I haven’t looked back.
In short, here’s what the 20-30-50 budget is about:
- 20% of your income goes towards your future goals and plans — think trips, furniture (we’re adults, right?!), the new iPad, your 401(k), whatever is in YOUR future.
- 30% of your income goes towards YOU! You can spend that money however you want, and not feel guilty about it.
- 50% of your income goes towards your essentials. This includes rent, groceries, and utilities.
When I started this budget, I realized that I don’t spend the entire 50% of my income on my essentials. So, I let myself split the remaining between my future and my fun. I also created a spreadsheet (+ Mint budget) to break the categories down even further. I was able to see that I could do everything I wanted within the budget + still be a responsible adult – what?! If you’d like to try out my budget, download my Google Spreadsheet template here. I’ve added a sample income, categories, essentials, and future expenses to give you a sense of how this works for me.
Do you have suggestions for how you budget? I’d love to hear them! Now go forth feeling financially responsible + free!