In The Know is now available on Apple News - follow us here ! You have to know how much money you’re taking in and taking out in order to tackle those issues. Last but not least, don’t be afraid to check your bank account. Review why and when you spend so that you know what’s working and what isn’t. She also said to examine your spending behaviors. Perez advised not to make any purchases you don’t need before having a good night’s rest so that you’re sure you really want it. You may end up doing a little less online shopping, but at least you know exactly where your money is going. “Take out the rest of the money in cash and divide it up into different envelopes that represent different spending categories. “At the beginning of each month, you set aside money that you’ll need for necessities and for savings,” she explained. This cash-envelope method is what Perez used to pay down $57,000 of debt in less than three years. Yes, there’s even a budget for those who don’t like tracking their spending. Perez recommended Nerd Wallet for free spirits. But the ratio is totally customizable, so use whatever suits your goals. If that all sounds intimidating, don’t worry: with this plan, 30 percent of your income will still go toward flexible spending. next 20 percent of your income should go to money goals, like saving, investing or crushing your debt.” Fifty percent of your income should go to needs: things like rent, utilities, transportation and food. “This simple approach breaks your spending into three no-brainer categories. “A less restrictive method, like the 50/30/20 budget, could be great for you,” Perez said. If chaotic good is your vibe, then you probably need some flexibility in your budget. Perez recommends the app You Need A Budget for this method. With this method, your income minus your expenses should equal zero by the end of the month. “With this approach, every month, you allocate all of your money to expenses, savings and debt payments.” “A no-nonsense method like the zero-based budget might work for you,” Perez said. If you’re the kind of person who lives in spreadsheets and who friends expect to create trip itineraries, you might be a planner. Here are a few money personality types and budgets that may resonate with you. “The big question to ask yourself is not necessarily about what budget suits your income - it’s more along the lines of what suits your personality and lifestyle,” Perez explained.
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