You’re not alone if you have trouble budgeting your salary and money. Most people don’t know how to budget their money or how much they can spend. The good news is that there are many ways to budget for your income and still have fun. Here are ways to budget your salary.
List Your Fixed Expenses
Fixed expenses are things that you have to pay every month. They include your mortgage or rent, car payments, student loans, and insurance bills. Fixed expenses are not flexible — they’re the same amount each month (or sometimes every two weeks).
Calculate Your Variable Expenses
Variable expenses change from month to month, such as groceries and gas. You must calculate how much you spend on variable expenses each month so you can set a budget for them. To calculate your variable expenses:
- Add up all your fixed costs (the ones you pay monthly, such as rent or mortgage).
- Subtract the amount left over from the total of all fixed costs.
Decide How Much You Will Save Each Month
It’s time to decide: how much should you save each month? The answer is simple: at least 10% of your monthly income. This is the bare minimum goal for your savings rate. If you can do more than this (and most people can), then by all means, do so. You may want to set aside 15% or 20% as a benchmark. The more established your savings are, the better off financially you will be when emergencies arise.
