Creating an effective budget is one of the most important elements of managing your finances. With the right management strategies, budgeting can help you save money, stay on top of bills, work towards your goals, and plan for the unexpected. One of these strategies is the 50/30/20 budgeting rule, created by U.S. senator Elizabeth Warren. This rule of thumb states that 50% of your income should go towards needs, 30% towards wants, and 20% towards savings.
To start tracking your spending, it’s best to look at the past three months to get a sense of your typical expenses. Besides that, tracking your monthly expenditure is also important to ensure that you are staying within budget. This will help you to quickly identify if you are not following the set budget and take the necessary measures.
Overall, budgeting is a great tool for everyone to use regardless of their income. It can help you manage your finances and potentially save money in the long run. Therefore, it is important to be aware of your fixed and variable expenses and to create a budget that you can stick to.
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2. “7 tips for creating an effective budget | Health & Wellness Services” University of Colorado Boulder, 21 Feb. 2023, https://www.colorado.edu/health/budgeting-tips
3. “4 Personal Finance Strategies for 2023” Baltimore Post-Examiner, 18 Feb. 2023, https://baltimorepostexaminer.com/4-personal-finance-strategies-for-2023/2023/02/18