Building a Budget

It's a Money Thing: Building a Budget Watch this video to learn about the 50 rule for creating your budget. So what does the 50 rule mean? 50% for... Needs 30% for... Wants 20% for... Savings Use the 50 rule to complete this statement. Remember to turn the percentage into a decimal and then multiply to find each amount. If your monthly salary after taxes is $2,000, then $1,000 should go towards needs, $600 should go towards wants, and $400 should go towards savings. Zero-Based Budget Strategy A second budgeting strategy that you can use is called the Zero-Based Budget. We will watch two videos to learn about this strategy and then answer some questions. Zero-Based Budgeting, Where Every Dollar Counts "What is a Zero-Based Budget?" What is the core characteristic that defines a zero-based budget? What is the goal? Bianca has take-home pay every month of $800. She anticipates having $675 of expenses in August. In a zero based budget, why is it important that she put the extra $125 in some budget category? Where do you suggest she puts it? Does using a zero-based budget mean that your bank account will hit $0 at the end of every month? Explain. Say that Bianca has a take-home pay of $800, she budgets every cent out at the start of the month, and she then needs less gas money than expected in August. She no longer spend the full $65 she budgeted there. What should she do with the leftover? Master Your Budget With The Cash Envelope System One hands-on approach to budgeting you might want to consider is the Case Envelope system. It involves real cash and real envelopes! We will use this article to answer the questions. Article: How to Use the Cash Envelope System to Master Your Finances How could Jayla use the cash envelope system with a monthly budget of $150 to split between clothes, sports equipment, snacks, and going out with friends. What are some reasons that a cash envelope system can be an effective way to budget for your "wants"? What is one potential downside of using a cash envelope budget? Regardless of the budget strategy (or combination) you chose to use, you should always consider the concept of "paying yourself first". Use this article to answer the following questions. This Simple Strategy Can Make Anyone A Millionaire - Why Not You? What does it mean to "pay yourself first"? What are the two reasons "pay yourself first" works so well? Explain the two different ways you can automate the process of paying yourself first.