Budgeting 101: Creating a Personal Budget

Updated: Jun 20, 2020

Why should I set up a budget?

Imagine that every single dollar you have in your bank account was an employee at your company.

If this was the case, you would want to keep track of every single one of them, right? That's essentially what budgeting does. It keeps you accountable for every dollar that you spend.

How should I set up my budget?

A golden rule for budgeting is the 50-30-20 Rule. It's simple. Every time you get your paycheck, divide it into three separate categories: Needs, Wants, and Savings.

Think to yourself.

Is ordering those brand new pair of Yeezys for your glow up really a need... or a want?

50% of your paycheck should be put aside for Needs.

This includes everything you need to stay afloat such as paying off your bills (especially that Netflix subscription), paying your rent, any transportation costs, and even groceries.

30% of your paycheck should be put aside for Wants.

This includes everything you want. You know... those cravings you get to spend your money impulsively. Don't feel bad about it! We all have those urges. Just make sure you set limits. 30% is a golden percent for your wants. This includes: Dining Out on Uber Eats or GrubHub, Shopping online for new clothes, Entertainment to keep you sane during these crazy times, and Travel expenses such as renting a Turo, staying at an Airbnb, or booking your next post-COVID vacation.

20% of your paycheck should be put aside for Savings.

COVID-19 has dramatically impacted every single one of us. Many have lost their jobs as well as their sense of security. In order to be prepared for whatever comes next, you should focus on having a reasonable amount saved up. Take 20% of your employee paycheck or your government-assisted unemployment paycheck and put it aside for Savings. Don't touch this unless you absolutely need it. Yes, I know iPhone 12 and PlayStation 5 are around the corner. These things are a want, not a reason for you to splurge from your Savings account.

Where should I set up my budget?

If you're using Chromabill, you can do it directly from the application. Head over to the Budget section in the application to set up your budget. From here, start the onboarding process to add your paycheck and set up your budget categories.

You can either select a popular category or set up a custom category.

Need more assistance with figuring out how to set up your personal budget?

Reach out to your Designated Support Specialist in our application and we'll walk you through the process!

#budget #budget101 #budgeting #chromabill #503020rule #503020budget #playstation5 #ps5 #iPhone #iPhone12 #Turo #AirBnB #Yeezy #Spending #impulse #netflix