Struggle With Budgeting? Following the 30/30/30/10 Budget Could Be Your Answer

If you know just a little bit about budgeting, you may have heard about some of the different methods one can use to budget. There are several budgeting methods out there, but today, we will touch on the 30-30-30-10 budget plan.

With this particular type of budget plan, you work with percentages, and this can be a great way to get started with budgeting as it provides a good sense of structure and guidance when it comes to dealing with your finances. Read on as we discuss the key elements of the 30-30-30-10 budget plan and how to get started with it.

What Is It, and Who Is It For?

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The 30-30-30-10 budget is a percentage-based strategy where:

  • 30% of your budget goes towards housing, such as rent or mortgage
  • 30% goes towards other essential expenses such as food, utilities, internet, etc
  • 30% of your budget goes towards financial needs such as savings, investments, or debt
  • The remaining 10% goes towards having fun, and this may include entertainment, eating out, travel, and so much more. This budget plan is great for anyone who needs to get started with budgeting or even somebody who wants a simple plan to shape up the way that they handle their finances.

Add Income

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The first step to get started with the 30-30-30-10 budget is to add all sources of income to know exactly how much money you have to work with. If your income is not the same every month, then you can either use an average or a lower typical average income.

Add Expenses

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The next step is to list and add all of your expenses on a piece of paper or spreadsheet if you wish. Be sure to include everything, and if you’re having trouble remembering it all, then perhaps you can check your past month’s bank statements.

Place Expenses Into the Correct Categories

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Once you’ve jotted down each expense you have every month, it’s time to place the expense in the correct categories. You have four categories to choose from, namely housing, required expenses, financial goals, and, last but not least, fun.

Set Goals

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The whole point of budgeting is to be able to devote your money toward financial goals, and it’s no different when implementing the 30-30-30-10 budget. With this plan, you get to have reasonable allocations of where your money goes, and you will have 30% or roughly one-third of your income going towards financial goals. Other economic goals you may want to set may include:

  • Preparing for retirement.
  • Saving for a dream vacation.
  • Saving for a house, and so forth.
  • Make Changes With Your Spending Habits to Make the Budget Work

You may find that you don’t have enough money to save and ultimately reach your financial goals after setting up your budget because perhaps you are spending too much on having fun. If this is the case then you will need to adjust some of your spending habits if you’d like to reach your goals with this budgeting plan.

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