Budget System
The Best Budget System in 2021
simple is often better especially when it comes to your budget,
there's an old budget system that's surprisingly accurate here it is:
there's an old budget system that's surprisingly accurate here it is:
take 100% of your income divide it into three parts 10% 20% and 70%
10% for savings 20% for debt payments 70% for your living expenses this becomes the benchmark for your budget.
now here are some practical steps to apply the 1027th budget system in our modern world
Step 1 : review your past spending by category
you've never done this ? mint.com is a great tool and it's free it'll automatically apply categories to most your transactions for the past few months and you'll simply touch up as needed on the trends tab you'll see a list of your expenses for each category .
now you're ready to check your 10 20 70 balance we have a great excel-based tool for this that you can download free using the link in this post or there's also a version for Google sheets if you don't have Excel you will probably want to use a computer for this step because it's much easier than a mobile device enter your total income and then your savings and expenses by category for six months to one year for each category of savings or expense apply a ten twenty or seventy category as appropriate, as you do this the graph will update automatically and you'll see exactly where your money is going and how you measure up to the ten 2070 benchmark
Step 2 : set your goals
that's the beauty of the ten 2070 budget system is that specific enough to help you set great budget goals but not so mynique that it becomes rigid so you want to work with the numbers on each category to see what you need to do to balance your financial saving and spending if you're not saving at least 10% of your income set yourself a challenge to start now every time you're paid if you have no debt but are only saving 10% of your income then you might challenge yourself to save closer to 30% work with the numbers and decide how you can best make adjustments .
then set your goals, set your goals either on paper or in your favorite app make it a place that you will check regularly that's the important part here sometimes paper makes that easier,
now you want to figure out what needs to happen step-by-step you see a good goal should be big and a little challenging but not out of reach the steps to get there should be attainable in specific something you know you can do so make a list of each step what you're going to do and win
as you can see the 10 2070 budget system is simple flexible and yet still specific try it out and you'll be glad you did.
finally here are a few tips to consider:
check automatically recurring expenses :
you may no longer need or use the products or services or you may be able to find less expensive options that work just as well .
Be flexible :
as you set your goals be prepared to be flexible but make up your mind not to allow flexibility to become an excuse if you have habit of making excuses it might help to have an accountability partner
save a copy of your 10 20 70 worksheet :
so you can come back in a few months and see how you're doing this is a process you'll want to repeat again from time to time to keep yourself on target and see your progress
consider your giving :
being able to give contribute to others contributes to our wealth and well-being some people give or tithe on gross income others on net income you choose your preference either way we recommend that you consider this expense as part of your living expenses so it comes from your 70 percent
be balanced :
don't try to cut too much from your lifestyle to pay debt or to save you don't want to be miserly and miserable nor do you want to be like someone who goes on a fat diet losing weight fast just to gain it all back plus some ....