5 Easy Ways to Start Budgeting

A great budget doesn’t need to be a complicated spreadsheet. It can be, if that’s your thing, but there are plenty of other ways to get started. With a few simple steps, you can create a budget that fits your life and your goals. Here are five of our favorite ways to get started.

The 50/30/20 Rule
This popular method keeps your budget simple and flexible. With the 50/30/20 rule, you’ll allocate your income to three key categories that support your financial goals.

Here's how it works:

• 50% of your income goes to needs like housing, groceries and utilities.
• 30% of your income goes to wants, like dining out or hobbies.
• 20% of your income goes to savings and debt repayment.

This balanced approach keeps your bills paid, while allowing space for the things you enjoy and saving along the way.

Use Zero-Based Budgeting
In a zero-based budget, every dollar has a purpose. The amount you spend on rent, savings, entertainment and other categories is planned at the start of the month, so you can limit overspending and stay in control of your finances.

To get started, determine your monthly income. Then, assign every dollar you earn to a category, like groceries or savings, until the amount remaining is $0.00.

Set Spending Limits with the Envelope System
This old-school method is still around for a reason! Start by setting a spending limit for categories like gas, groceries or fun money. Then, fill an envelope with the money you’ve budgeted for each category (or deposit the money into a category-specific account).

As the amount in your envelope decreases, you’ll have a clearer idea of just how much is left to spend in each category. And once the envelope is empty, that’s it for the month. It’s a great way to keep yourself on track and be more mindful of spending habits.

Pay Yourself First
If you want to use your budget as a tool to save more money, this is the method for you. Instead of treating your savings like an “extra,” the pay yourself first method considers your savings and/or retirement contributions an essential bill, like rent or utilities.

Start by setting up automatic transfers to your savings or retirement account every time you get paid. Even $5 a month will make a difference. Prioritizing savings—especially when automated—helps you build a financial cushion and peace of mind over time.

Use a Budget Calendar
If you find yourself running short between paychecks or missing bills, a budget calendar can help. Use it to map out when your income hits your account and when your bills are due. Then, refer to your budget calendar throughout the month and use it as a tool to inform your spending. This way, you’ll ensure you’ve got enough in your account to make essential payments, avoid late fees and smooth out your monthly expenses, especially if your income varies.

Start Your Journey Today
Budgeting isn’t about being perfect, it’s about progress. Whether you’re building your first budget or refining your strategy, the best thing you can do is get started.

If you have any questions, we’re here to help. Send us a chat, call 800.856.7328 or visit your local branch.