1. Determine Your Budget.
The first step is to calculate two things: your income and your expenses. That means everything – from grocery necessities, to bill payments, to weekend spending. After you collect the numbers, organize those expenses into wants, needs, and savings. Needs would be bills, food, rent, and other necessities, while the amount of money that’s left is your lifestyle budget or wants.
While everyone’s situations are different, many savers aim to follow a 50/20/30 budgeting ratio*: reserving 50% of their funds for necessities, 20% for savings, and 30% for personal spending.