How to Budget for Savings – A Simple Guide

'How to budget for savings' has to be one of the most popular questions that people with new jobs ask. It is nearly impossible to save money in this economy. Not to mention, it is so easy to spend money and so hard to make an adequate amount of it. To budget means to have a plan for every dollar you earn. In this way, you will be able to save money for future plans or past debt whilst also being able to tend to your needs. In this post, you’ll find all the easiest and convenient ways to budget for savings.

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Best Ways to Budget for Savings 

Here's a list of ways to help you same some bucks without consuming too much of your energy or giving up things that you absolutely love: 

50/30/20 Rule 

This is a fairly simple method. The rules of this technique are that 50% of your income goes to your needs such as rent, healthcare, food, and general bills. Then 30% of your income can go to things you want such as eating out or shopping. And the last 20% has to be put in a savings account or utilized to free some debt. 

Now, this method as you can see is very simple and very effective, however, it only works if you make enough pay that 50% of your income will be enough for all your needs. For example, if you make minimum wage then 50% may not be able to cover everything. Not to mention if you have health problems that require you to purchase expensive medicine, 50% may not be enough. In this case, the 70/20/10 rule can be applied. This works the same way as the 50/30/20 rule except you can use 70% for things you need, 20% on things you want, and put down 10% in your savings. This ratio obviously is not as quick to save as the other but your health and needs should always come first and you shouldn’t be penny-wise when it comes to your healthcare. 

Monitoring Your Needs

Things you don’t need for your life, don’t get. Do you need to go on that vacation at the resort or can you settle for a break at home?  Do you need the new model of that car or can you settle for an older perhaps used car? These questions don’t exactly have a right or wrong answer but they can help lay out your priorities. 

Cook at Home

Meal planning also helps if you make a very specific list of groceries and stick to it. Never be embarrassed to use coupons as often as you can. This cuts down on your necessary spending whilst still getting you what you need. 

Thrift It When You Can

When buying clothes it never hurts to just go to the thrift store but for items like undergarments always buy for hygiene reasons. If you’re buying toys you should get them from yard sales or second hand, but for items like mattresses, you should always buy a new one. 

Get Digital Help

If you have a particular problem with spending, there are many apps that monitor your spending and can remind you of any important payments you need to make and can tell you if your balance is too low. This can help as it will help you to always remember your priorities. 

Now the question is, how can we stick to our budget? It will help if you make a list of things you need and compare them with your income. This will help give you an idea of how much you afford to spend and how much you can budget to put into your savings. 

All in all, it may seem an impossible task to budget for savings but if you can practice self-control and limit your spending to things you need and put the rest to a savings account it really is very possible. 

Surely these tips can help, but you also need to find a personal way on how to budget for savings. Don’t go to expensive restaurants, eat at home as much as you can. Don’t buy anything you don’t need when going for groceries and stick to a specific list of things you need. Overall, don’t overindulge, stick to your budget.

  • This post is tagged in:
  • Budgeting and Savings
  • Income and expenditure
  • how to budget
  • how to save money
  • save money
  • personal finance