Budgeting is one of those things that we all know we are supposed to do. But actually getting around to planning out how you spend the money you earn can be daunting. Stefanie O’Connell has two budget models that make starting out easy.
The first is the percentage budget. With this plan, you designate 50% of your income to your necessities: rent and groceries, for example. Thirty percent is designated to your wants, such as entertainment or dining out. And 20% is set aside for savings.
The other plan is called the zero-sum budget. O’Connell explains that this plan is good for freelancers or other people whose income fluctuates from month to month. In this system, you plan your spending a month in advance so as not to spend money you don’t have.