Beginners Guide to the “50/30/20” System

There are several budgeting techniques and it makes the process of choosing which one works best for us a bit overwhelming. So, my goal is to explain the several existing methods, in order to make your decision slightly easier.

I also have a Beginners guide to the “cash envelope” system, if you want to learn a bit more about it.

The 50/30/20 categories

50%- corresponds to every need you have throughout the month. These needs might be rent/mortgage, utilities, groceries, car payments, etc.

30%- corresponds to your wants. For example clothes, memberships, subscriptions, dining out, etc.

20%- corresponds to your savings.

How to budget according to this system?

1.Figure out the exact amount you can work with

I always start with this step in all my budgeting posts but trust me, this is crucial in for you to succeed at it. You need to know the amount that is left after deducting your taxes, social security, etc.

2.Calculate the amount for each category 

Income (step1) * 0,5= Needs

Income (step1) * 0,3= Wants

Income (step1) * 0,2= Savings

These will be the exact amounts you’ll be able to spend on each category.

Tip: try to stay under budget in the needs and wants categories, that way, you will be able to add more to your savings. Enabling you to create future investments, savings account, an emergency fund or even pay off any debt quicker.

Feel free to adjust the percentages if you think that will benefit you. Overall, it’s a really good method to start a budgeting journey and increase your savings.

Thank you for reading it, and I’ll see you in my next post.

Beginners Guide to the “Cash Envelope” System

The “cash envelope” method is a great way to save money, to pay off debt and even to build your retirement account. It’s actually an easy way of achieving some of your goals, you get to save for that dream holiday, for the house of your dreams, for the huge wedding you’ve always dreamt of or even to plan the move for the country you’ve always wanted to live in.

So, here’s how this method works:

1.Figure out what you can work with.

Start with your tax and expenses free income. Know exactly the amount you’ll be able to take out of your bank to use it on the envelopes. Keep in mind, some things are paid with your debit card, just make sure to incorporate them on your budget.

If you need help making your budget, you can read this post that I wrote on How to budget your income.

2. The categories

This step may be different from mine. I’ll give a few examples with my categories, but you should adjust them to your life. Mine are: Groceries, needs, knowledge investment and fun money.

3. Choose the envelopes

Try to get envelopes with different colours, this will help you memorize which envelopes correspond to which categories and also because they’re cuter! I use paper envelopes but there are other envelope systems, for example, the Dave Ramsey’s.

4. Fill your envelopes

Now that you know your budget and you have the categories on your envelopes, you can start filling them with the specific amount that you designated for each.

Don’t forget to leave the money meant for the things you’ll pay with the debit card in the bank.

5. What’s next?

Well, now you go shopping and only spend what’s in the envelopes. Some people like to just have their envelops when they’re going shopping. To be quite honest, it’s something that bothers me, so when I go shopping I take the amount from the specific category and put it in my purse.

6. At the end of the month

Whatever is left on the envelopes and on my bank account that I didn’t use that month, I put it into savings. That was key to sky-rocket my savings account.

I really hope you try this method. Thank you for reading it. I will see you in my next post.

5 Fun ways to save money

Here are 5 ways to save money. You will have access to 3 free printables. They will help you keep track of your savings and it will make it a lot more fun.

1.Save $800 in 20 weeks

You can click below and download this printable. You just need to mark off the amount as you go!

Click here to download it.

2. Save $1,820 in a year!

This is one of my favourites. If you save 5 dollars every day, at the end of a year you’ll be left with $1,820! It could be your emergency fund, for example.

3. The $120 Challenge

Every month put away 120 dollars and at the end of a year you’ll have gathered 1,440 dollars!

4. 12 week challenge

Save $300 with the help of this printable. You just have to download it. Have fun!

Click here to download it.

5. Save $1,270 in 6 months

With the help of this printable, at the end of 24 weeks you’ll have 1,270 dollars to spend on whatever you want.

Click here to download it.

I really hope you enjoyed this blog post, it was so fun to make these printables for you. Thank you so much for reading it, I’ll see you in my next post.

5 things you should stop buying

We all are affected by consumerism, and everything is so reachable nowadays, that we often don’t realize how much money we are overspending on our day-to-day lives.

So, here’s a small list of tips you can incorporate in your routines, that will have a huge impact on your savings at the end of the month.

1.Stop buying coffee outside

You can make your own coffee and bring it with you instead. Those fancy coffee shops are usually extremely expensive, plus those drinks have too much sugar in it. Your health and your wallet will appreciate it.

2. Join your local library

If you’re as addicted to books as I am, you’ll find that at the end of the month you’re practically broke. To change this, I joined my local library. I pay a low monthly fee and I get to loan tons of books. You should definitely try it.

3. Get reusable water bottles

First, we all know that we need to drink a couple of liters of water per day. That equals 4 small plastic bottles. This isn’t just affecting the environment but is also making you overspend every day. If you get those reusable bottles, you’ll be saving both your money and the environment.

4. Quit or decrease dine outs

This is pretty self-explanatory. If you decrease going out for meals you’ll save more money, but obviously, don’t make this a strict rule, you can be flexible. The point is to save money but still enjoy life!  

5. Review your subscriptions

Go through your subscriptions and figure out what you actually consume. You should finish or adjust the ones that you are no longer using.

That is it, thank you for reading it. I’ll see you in my next post.