There aren’t too many words that I hate because it is kind of weird to hate a word. But I hate the word budget. For most people they hear that word and just shut down. I know that is the way I feel when I hear it. It just sounds boring and complicated and about the last thing I want to do with any minute of free time I get. Maybe that is why only about 1 out of every 3 Americans actively keep a budget. I think I have a better term. We all spend money, some of us more than others, and I think it is a good idea to have a plan for that spending. So when people ask me about budgets, I tell them I don’t have one but I do have a spending plan. Plans change. Plans get updated when life throws you curveballs. In my own life, my spending is so much different today than it was in early March. I bet yours is too. The world is different and so is how we spend our money so it seems like a good time to go back to basics on a simple methodology to help you set your spending plan. It is called 50/30/20. The 50/30/20 plan divides our take-home pay after taxes (so this is the amount of money on your paycheck) and divides it into 3 categories or buckets of spending. Needs, Wants and Savings. The numbers 50/30/20 represent the percent of our take-home pay that we allocate to each of the categories. So 50% of the money in our spending plan should be allocated to Needs, 30% to Wants and 20% to Savings which also includes extra debt payments on credit cards or student loans. Let’s take a closer look at each category. Needs are the essential items to keep ourselves and our families safe and healthy and it represents where most of our money will go.  These are our basic necessities. Food on our tables, a roof over our heads, healthcare, utilities like power and water and I also include basic internet here as well because in 2020 this is a need. The Needs bucket also includes access to reliable transportation, required insurance for your car, apartment or home and any minimum debt payments. Now let’s talk about the Wants bucket where 30% of your take-home pay is the target for your spending plan. These are the nice-to-have’s in our life. This spend isn’t necessary but it brings our life some joy and is usually indicative of our interests and passions. So things that fall into this bucket are meals from restaurants, our gym memberships, splurges on clothing, accessories and technology like a new iPhone and your subscription services just to name a few. The last bucket of spending, our 20% category, is all about Savings, investments and debt repayments over and above the minimums. This category is where our emergency savings or rainy day fund money would fall in our spending plan as well as contributions to your retirement savings like a 401k or IRA and money you put into stocks or cryptocurrencies either through a brokerage account like E-Trade or Robinhood. You may have a money goal of paying down your student loan or a credit card, which are great goals by the way, and this bucket of your spending plan is where you would allocate those payments against the principle balance to wipe out those debts faster than just paying the minimums. To set expectations, your spending probably isn’t going to match when you first do this but it gives you a starting point and will help you make financial decisions over time about where to spend a little less and where to allocate a little more.  My recommendation is to give it a shot, take the time and see where you land. I think you will find it helpful. --- Send in a voice message: https://anchor.fm/calmcash/message