Tips and Advice

How Much Should I Spend? Easy Budget Tips

The 50/30/20 rule is budgeting technique to divide your monthly after-tax income into three categories: income 50% for needs, 30% for wants and 20% for savings.
Written by:
Gina Freeman
Edited by:
Kristin Marino verified

Budgeting is a pain. And who has the time? However, if money just slips through your hands, you need an easy budget system.  Fortunately, you can successfully manage money with little time or training.

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Easy budget (without budgeting)

You don’t have to manually write down each and every item you buy. And budgeting doesn’t remove the joy from your life. In fact, a good budget saves you money where you’re overspending and leaves you more for the things you care about. That’s more fun, not less.

These five easy budgeting rules can help you keep your finances in check without a strict budget that stresses you out.

1. Track your spending automatically

Use one debit or credit card to make all of your purchases so you can automatically keep track of your spending. At the end of every month, you can log on to your debit or credit card account and see exactly where your money went.

So, should you use a credit card or debit card? If you are confident you can pay back your credit card in full and on time every month, opt for a credit card with some good rewards. However, if you tend to carry credit card balances, it’s smart to control overspending with a debit card.

2. Understand your fixed monthly expenses

Your fixed monthly expenses are about the same each month, and these dictate how much you can spend on other things. Understanding them is the first step to lowering them if necessary. And you should not be spending without knowing what’s available after covering your monthly costs.

Your monthly expenses will likely include:


Your mortgage, property taxes, homeowners insurance, and homeowners association fees are part of your housing expenses if you own a home. If you rent, include rent and renter’s insurance in this category.

Monthly bills for living expenses

Your monthly bills may be for internet, cable, electric, your phone, and daycare, private school, or college tuition. While utilities can fluctuate, you should know their approximate monthly cost and be capable of covering them.


If you have a car, your transportation expenses may include your car payment, car insurance, and gas. On the other hand, if you take public transportation, consider bus, train, and subway fees.

Loan payments

It’s also important to figure out how much you owe in student loans, personal loans, credit card minimums and other loan payments each month. These most likely appear on your credit report. According to federal law, you can get a free copy of your credit report from all three reporting agencies once a year.

Once you’ve calculated your fixed monthly expenses, subtract them from your monthly take-home pay. The number you get is how much you have left over each month to spend and/or invest. You can think of this number as your monthly spending allowance.

Related: Create “Emergency Savings” With a Personal Loan

3. Automate your monthly expenses and savings

Regardless of how often you get paid, you may find it difficult to pay your monthly expenses on time or set aside money for savings. If you automate your expenses and savings, you won’t have to worry about whether you paid your cable bill by the deadline or contributed to your 401(k).

With this strategy, you can save time, get out of debt, stay out of debt. And most importantly, gain some much needed peace of mind and control of your money.

4. Monitor monthly spending

Your discretionary spending is all about you. But don’t let your fixed expenses plus your discretionary spending (aka “walking around money”) exceed your net (after tax) income.

One way of keeping the lid on spending is to only pay cash when you shop or dine out. Studies show that the act of taking cash out of your wallet (instead of just sliding a card or tapping a phone) registers much more strongly. People who pay in cash make fewer impulse purchases.

Alternatively, check the debit card or credit card you’re using for purchases periodically throughout the month. And don’t enable “one-click” purchases on any websites.

If your allowance is $1,000 per month, that’s $250-ish a week. Check your balance every Friday before heading out for weekend fun. If you’re careful during the week, you can reward yourself with more fun money.

Related: Why a “Sinking Fund” Is the Best Way to Save

5. Make room for fun

And that’s the whole purpose of this exercise. Knowing what you can spend without getting into trouble helps you prioritize and do what’s most important to you. While staying out of financial trouble.

One of the reasons many budgets fail is because they don’t create any room for fun. Make sure you use your monthly spending allowance to do some things you enjoy. Whether it’s going to the movies, eating at your favorite restaurant, or taking a weekend trip, rewarding yourself for paying your bills on time and saving for long-term goals won’t hinder your financial health. In fact, it’ll motivate you to continue taking great care of your money.

Related: Debt Consolidation With a Personal Loan

More money!

If you find that your monthly spending allowance is lower than you’d like it to be, you have two options: increase your income or reduce your expenses. For example:

  • Taking a side job
  • Looking for a better-paying job
  • Getting a roommate
  • Shopping your insurance policies
  • Selling your car and buying a cheaper one
  • Paying off some bills (have a garage sale?)
  • Eating out less
  • Dropping services you don’t use (those apps we forget we have)
  • Combining trip to save gas
  • Carpooling

And you might be able to save by restructuring your debt. For instance, replacing high-interest credit cards with a personal loan or home equity financing.

By following these easy budget tips, you can manage money without budgeting and meet or (even exceed) your financial goals.

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