Short-term savings are things like gift purchases or a brand new pair of AirPods you’ve been desperate to justify buying. You can split this section up into short-term, mid-term, and long-term savings. The next thing to look at is financial goals for the future. Savings goals – what you want for the future Not sure how much you should be putting away for retirement? This retirement calculator is your new best friend. Aim to save at least 5-10% of your income after taxes for these accounts. Your priority here is to cover your 401k and Roth IRA. Important investments – what future you needs to live What you have left over is for savings and some fun. Ideally, this figure should be around 50-60% of your net income. Then, subtract this total cost from your monthly take-home pay. This way, if you have an emergency or surprise expense, it won’t derail your month. Why? This will cover the things you haven’t accounted for. Once you’re finished, add an extra 15% on each one. Get it all written down and write the cost next to each one. Starting with the fixed costs, list everything you need to spend during the month, including rent/mortgage payments, car payments, loan repayments, insurance, and utility bills. Guilt-free spending (dining out, movies, happy hour drinks).Savings goals (home down payment, vacation fund).Important investments (401k, Roth IRA, emergency fund).

You should be able to categorize your spending into four different types: Let’s start with an overview of your money and spending.

Budget percentage breakdown household