Budgeting For Dumbos (and well, anyone)
Creating a budget is a tried-and-true method of making sure you are living within your means and still have some cash left over for savings. Now look—I'm not saying you need to stop eating out and start eating the same thing every single day—or stop going out to bars and start making your own homebrew (although that could be a fun hobby). But I am saying that you should have a good idea of how much you spend on everything in your life—and structure it so that you are in control of your budget, instead of the other way around.
See below for an example budget for a single recent grad that earns $65,000 annually. There are two ways that I like to structure a budget:
- Target savings amount
- Target rent amount (i.e. How much can I spend on rent while still having a cushion of savings)
Take a look at both examples below.
Note: If you like this structure, download this tool in excel. All you have to do is type in your income and expenses. My numbers don't lie!
1. Target savings amount
Edit your income and expenses to calculate your implied savings every month.
2. Target rent amount
(i.e. How much can I spend on rent while still having a cushion of savings)
Enter your income, expenses, and a desired savings target to calculate how much you can afford to pay in rent.
Take the next step
Curious to see how you stack up? Download this customizable budget tool to build your very own budget. It's very easy to use: simply enter your income and various expenses, and your personalized targets will pop out.
Is this helpful to you? Please let me know by commenting below or sending me a message!