Step 2-Basic Steps to Budgeting

In its simplest form, a budget is a plan for your monthly spending and requires just three steps:

  1. Add Net Income
  2. Subtract Expected Expenses
  3. Adjust Income or Expenses or Both

Most spending plans will include these three steps to one extent or another.

Spending Plans

We offer three budget calculators below that you can choose from if you prefer a formal budget. We highly recommend you choose at least one and that you include your email so you can receive a copy in your inbox.

50/30/20 Budget

This percentage-based budget takes your paycheck (or any source of income) and divides it into three sections:

50% goes to pay for your living expenses

30% goes to lifestyle choices

20% go to saving and investing

To keep it simple, you get to decide what constitutes a “living expense” (e.g. housing and food), what a lifestyle choice is (e.g. dining out), and what you save and invest for.

Money Pie Budget

Money Fit developed the Money Pie budget to offer a little more guidance for using a percentage-based budget. Instead of just three categories, it offers six:

10% GIVE (Generosity)

50% LIVE (Housing and Utilities, Transportation, Food, Cell Phone, Internet…)

10% PREPARE (Save for Emergencies and Short-term Goals)

10% PLAN (Invest for Retirement and Long-term Goals)

10% IMPROVE (Invest in Yourself, Start a Business, Get a Degree/Certificate)

10% ENJOY (Have Fun)

Simple Budget

A pared-down version of the traditional budget, our Simple Budget asks you to estimate your monthly expenses in just 10 possible categories. It then totals up your expected expenses.

The calculator then displays your likely total spending for the month. Your task becomes one to earn enough money to pay for those expected expenses.

Take a Break to Budget

See how easy budgeting can be by clicking on one, two, or all three of the links below. They will take you to our free budget calculators where you can create a personal or household budget in no time:

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