Here’s How to Build a Budget You Can ACTUALLY Stick To

You got this.

via @thedailyedited

Talking about money isn’t always the sexiest conversation.

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Finances are a huge source of stress for most of us, and with good reason—eight of ten Americans are in some form of debt, whether it be from credit cards or personal loans. But as cringe-worthy as thinking about your budget feels, you’d be surprised how calm and capable you’ll feel after sitting down and wading through all of your accounts. Learning about what you’re working with is empowering (promise!), even if at first it feels overwhelming.

Why do you need a budget?

Well, let’s start with the obvious reasons. Most of us have a hard time managing our cash flow (see above statement about Americans in debt), and are generally disengaged from what’s going on in our bank accounts unless we’re checking in on a low account balance reminder—especially as we make the leap from reliant students to fully independent young adults.

Beyond making sure that you don’t overdraw your checking account, you’ll eventually want to start saving for a crash fund as well as for retirement (yes, seriously.) Setting your budget will make it way easier to simultaneously start saving and get your spending in check.

How to make a budget you’ll actually stick to

OK, you ready? You’ve got this, babe. Here are the three steps to creating a budget that you’ll actually be able to follow.

Calculate what you’re working with after taxes have been taken out of your paycheck

Usually you’ll be able to tell exactly what your net take-home cash is by looking at your paystub—generally, that’s a lot smaller than what your salary is. If you’re an independent contractor and don’t automatically have your taxes taken out every month, time to make an estimate.

Figure out what your essential costs are

OK, now that you know exactly how much money you’re taking home at the end of every month, it’s time to figure out your base costs. Those are things like rent, credit card payments, utilities, groceries, and other non-negotiables that you truly can’t live without. Everything else—shopping, eating out, travel, your morning matcha latte at the cafe around the corner—is considered a discretionary purchase … meaning it’s nice to splurge on every once in a while, but not necessary for your existence.

Use the 50-20-30 rule

Now everything is out in the clear—time to do the actual budgeting! Use the 50-20-30 rule as a guideline:

50% of your paycheck goes to your essential costs

20% of your paycheck goes into savings and paying off debt

30% of your paycheck goes to discretionary purchases—all the Nikes!!!

Ready? You got this. Make it rain, girl!