CyBirdCBTT
The Nest

Budgeting

Budgeting can take a lot of self discipline. Make sure to check out budgeting software like PersonalCapital or Mint to help you track your budget and stay on the ball!


Intro to Budgeting

Within budgeting, there are a variety of methods you can use. We'll walk through a few with general guidance, but you will want to adapt these programs to what fits your situation best!

50/30/20

This method tends to work best for people that already have good established money management skills and are not in a lot of debt. It breaks your income into three categories:

50% Needs

30% Wants

20% Savings/Debts

While fairly self explanatory, it is important to keep in mind to account for taxes. If you make $50,000 you actually may only take home $37,000 after taxes get withheld. Use the $37k when planning this budget to keep yourself in a healthy range and to prevent overextending yourself!

Dave Ramsey Method

You've probably heard of them before: they're called the Baby Steps. Designed to get you OUT of debt fast and into good standings with your income. Until you reach step 3/4 you really shouldn't be spending any money on "wants", only on "needs" in an effort to pay off debt fast and avoid paying interest.

Step 1: Save $1,000 for an emergency fund

Step 2: Pay off all debt (except for mortgage)

Step 3: Save 3-6 months of living expenses

Step 4: Invest 15% of your income for retirement

Step 5: Save for kids College funds

Step 6: Pay off your home

Step 7: Build wealth and give back

Automated Budgets

Wouldn't it be nice if the money was already placed in the appropriate bucket without you having to transfer it between accounts?

Don't be afraid to use multiple savings accounts at your banks to split up your money instead of trying to keep tabs in a spreadsheet for its use. 

You can even set up your direct deposit to place certain dollar amounts or percentages of your paycheck into each account separately. It greatly helps to stay organized and stick to your budget! It can also be used to help set specific money aside for things like a new car or a down payment for your house. Using one account blends all this money together and it can be hard to stick to your budget. Use multiple accounts and automate your direct deposit so you don't have to lift a finger to start your budget!

Disclaimer: We are not financial advisors. This is only used to inform and educate.