Budgeting is the foundation of financial success. It's the process of creating a plan to manage your income and expenses, helping you control spending, save money, and achieve your financial goals.
50% needs, 30% wants, 20% savings
Every dollar has a purpose, income minus expenses equals zero
Cash allocated to spending categories in physical envelopes
Save/invest before allocating money to expenses
Allocate percentages of income to different categories
Spend money based on your personal values and priorities
Calculate your total monthly after-tax income from all sources.
Track every expense for a month to understand your spending patterns.
Group expenses into needs (housing, food) and wants (entertainment, dining out).
Define short-term and long-term financial objectives.
Assign every dollar to a category: needs, wants, savings, or debt payment.
Review your budget regularly and make adjustments as needed.