Budgeting: It's Part of Life

Written by David Dixon, EdS ~ 7/1/2024

Starting as a college student/young adult can be a scary time. You have just finished high school and you are making your own money and decisions. It’s important to make wise decisions so you don’t face the consequences for years to come. This is why financial literacy is important. In this blog, we are focusing on an important part of life as an adult - budgeting

As a rule of thumb, you should plan to:

• spend no more than 80% of your monthly earnings.
  
  
• place 20% into Savings.

One popular method is the 50/30/20 budget. This type of budget proposes:

• spending 50% of your monthly take-home pay on necessities/debts
  
  
• 30% on wants
  
  
• 20% on savings.

By budgeting, you create a pathway to financial stability by keeping a tab on expenses, creating and following a plan. Building a budget allows you to plan your spending, pay bills on time, create and maintain an emergency/savings fund.

The savings account can be further divided:

• emergency fund
  
  
• long-term key purchases such as saving for major expenses like a car or home.

A budget puts you on a stable financial pathway for the present and the future.

“Money is only a tool. It will take you wherever you wish, but it will not replace you as the driver.” ~ Ayn Rand

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