Saving and Budgeting for Beginners

Introduction by Host: Dr. Gee

As we are nearing the end of our financial literacy series, I want to talk about saving and budgeting. We are near the end of the month, and for many of us, that means payday is coming soon. We need to know how to spend that money, how to budget that money, and how to save that money. Let’s dive into this important topic!

Point 1: Common Ways of Budgeting

Budgeting is the way you plan out how to spend the money that you earn. If you do not budget, you may end up spending money that you do not have. The way you budget is simple. You figure out how much you are bringing in and how much expenditure you are planning on, then cut out extra expenditures.

But how do you know how much of your income should be dedicated to what? A common way of dividing income is the 50-30-20 rule. 50% of your earning should be spent on your expenses (rent, bills, etc.), 30% is other spending, and 20% goes into savings. There are other variations, but this is a widely accepted one.

Point 2: Pay Yourself First

Before you pay your bills, buy food, or other spending, pay yourself first. Put 10% of your paycheck into saving immediately. Some banks have the option to do this automatically, so that you will not be tempted to spend that money. You may think it is impossible to live without that 10%, but if you lock it away, you will find a way to make the other 90% work. 

Point 3: Ways of Budgeting

There are many tools you have that you can use to help you budget. For many people, using pen and paper is enough. If you are more tech-savvy, you can use spreadsheets like Excel or Google Sheets. There are even mobile apps that you can use for budgeting, like Mint, Honeydew, GoodBudget, and others. Find a way that works for you and start planning your budget. 

Summary

Budgeting is very important in our world today. It can seem unimportant, but without it, it is so easy to spend more than we make. With good budgeting skills, we can stay on top of our finances. We can make our money work for us, instead of struggling to make money. Find a way to budget that works for you, keep track of your income, limit your excess spending, and your finances will thrive!

By Dr. Gee, Success and Holistic Wellness Advocate