It’s time to accept it: to be able to save you need to have a budget… but what happens with them is that for certain people it can be complicated. But, in reality, the objective of having a budget is to make life easier for us; Maybe that’s why a survey done by Learn Vest discovered that ‘having a budget’ was the main financial goal for 32% of the people interviewed: because the truth is that we have not discovered how to adapt our minds about it and to obey that type of economic limitation.
At this point it is necessary to clarify something: a good and simple budget should do the job of managing your finances for you, and not the other way around. It is so important to remember that the budget is not about depriving yourself. In fact, creating a framework frees up funds for fun things. And when you know that you are within the parameters of that budget, you can enjoy your money without any guilt or pay the consequences.
In the spirit of celebrating spending (smart) , this is one of the best strategies : the 50-20-30 rule . If you use it, you will be pleasantly surprised at how quickly your financial goals are focused.
50 percent (or less) of your total monthly income should go to the essentials: absolutely critical things: groceries, rent, utilities, transportation to and from work.
20 percent (or more) is fit for future financial goals, such as canceling debts, strengthening an emergency fund, and saving for retirement.
That leaves 30 percent (or less) of your net salary for vacations, going out to eat with friends, go shopping and have fun (in addition to manicures, serums, yoga classes… etc.).
Keep your 30 percent in a separate account from the one you use to pay your bills, so that you do not take advantage of an emergency in your holiday basket.
The reason why everyone likes this budget is because you make sure that you meet important financial priorities, while leaving space for you to really live and enjoy everyday things. So far the 50-20-30 rule has never disappointed anyone (let it be known).
Best of all, this system is a first step towards creating a more comprehensive financial plan (one that includes investments, for example): without a doubt, it is one of the smartest moves a person can make with money.