As a designer, needs and wants are important lexicons in my dictionary. Let us define needs and wants first.
Need = something that you cannot live without
Want = something that you like but you CAN live without
Now go ahead and divide your month into needs and wants. Groceries, housing, medication, health insurance, utilities including wifi etc are you needs. You cannot survive without them.
Your Netflix, shopping, eat outs, wine, hobbies etc are your wants. You can live without them but may cause a little inconvenience. It enhances your lifestyle greatly for sure but at a cost.
So here is a simple framework, a golden thumb-rule that I use for budgets. 50/30/20. 50% should go to your needs. 30% towards your wants. 20% towards your save category.
The save category includes your dx (emergency fund), retirement, credit card payments etc. I did propose living in half a pay check if you can. The more your save the better it is for your financial freedom but if you are living pay-check to pay-check, at-least this much must be done consciously every month. Do this on your after tax money (That which comes to your hand after paying all the taxes). This is not rocket science but if you diligently split your budget in 50/30/20 and look at your actuals, you will know where every single penny is going. This will help you adjust your life and lifestyle accordingly.
🥂to budgeting!
