by Cam G.
How to Budget
Budgeting is one of the most essential skills that everyone should be good at. Whether your salary is $5 million a year or $50,000 a year everyone should have a planned out budget. A survey done by debt.com in 2018 showed that 33% of people do not have a budget plan. In this day and age it's easier than ever to create a budget with the amount of technology available to us. I will be discussing what resources to use, common plans and how to make your money work for you.
Online Banking
Just about every bank offers online banking nowadays. With mobile banking you can deposit checks, pay bills, transfer money and even create a budget. You don't have to make a trip to the bank and wait in lines, instead you can do whatever you need online in seconds. Online banking is available 24/7, therefore making your accounts very convenient. Often with online banking, mobile banking is offered. Mobile banking is very similar to online banking but the bank offers an app to make online banking even more convenient. Another positive of online banking is that each user can view their transaction history. Having access to your transaction history makes it easier to create a great budget.
Budgeting Resources and Plans
There are multiple apps to help you budget. Some of the best budgeting apps are personal capital, mint and pocketguard. These apps will help you create a personalized budget and save your money once you enter a salary. Another way to create a budget is the old fashioned notebook. You can always keep track of your spending and set up a budget in a little notepad or notebook. 50/30/20 is the most common method when it comes to budgeting. The 50 represents 50% of your paycheck going towards needs like rent, bills, gas, food and more. The 30 represents 30% of your paycheck going towards wants like eating out, movies, concerts and more. Finally, the 20 represents 20% of your paycheck going into savings. You can add the savings towards emergency funds, IRA's and other retirement funds.
Making Money Work for You
You can simply make money from your savings just by opening the correct accounts. IRA's and index funds are very simple accounts to open. Typically these accounts will increase by 8% annually. Most advisors would recommend putting your savings into these accounts not your wants or needs portion of the budget. Another way to make your money work for you is the stock market. The stock market is going to take a little more work to get educated on but, once you get educated it can be a very good source of income. An app that will help beginners get into the stock market is Acorn. Acorn rounds up your purchase to the nearest dollar and puts the remaining cents into a stock of choice. This is a nice way to grow your money slowly instead of paying with cash and having loose change.
Works Cited
Csiszar, John. “Advantages and Disadvantages of Online Banking.” GOBankingRates, GOBankingRates, 17 July 2019, www.gobankingrates.com/banking/banks/disadvantages-advantages-of-online-banking/.
Hanscom Federal Credit Union, Hanscom. “How to Set Up a Budget.” Hanscom FCU MoneyWisdom Blog, Hanscom Federal Credit Union, 22 Apr. 2020, go.hfcu.org/blog/how-many-americans-use-a-budget#:~:text=According%20to%20a%20Debt.com,do%20not%20budget%20their%20money.
Even though budgeting may seem like a boring thing, it is quite impactful and important to do it. You did a great job at explaining how to do budgeting. Even organizing just a little bit can go a long way.
ReplyDeleteAshley Anderson - This information is actually really interesting! I enjoyed how you clearly explained the specific ways you can budget instead of just explaining what budgeting is. Another thing I noticed about your blog was how you included the 50/30/20 Budgeting Rule. Last week, I actually read a blog all about the rule, so I found it super interesting to get your perspective on it! In regards to the 50/30/20 Rule, do you think that it works in every financial situation you face? I also did a little more research on other rules like the 50/30/20 Rule in case that doesn't work for some people. Education Credit Union explains that the 70/20/10 Rule is another one that people could use if the 50/30/20 one doesn't work for them. It is crazy to see all of the different rules people have created for the budgeting process and I love how you incorporated one of them into your blog post!
ReplyDeleteI think budgeting is really important so its interesting seeing that 33% of people don't budget. I also think it was helpful to put some of the names of good budgeting apps in your blog post.
ReplyDeleteBudgeting is really important. I plan on budgeting some of my money into investing so that in the long run I can help myself out. And I will probably open a Roth IRA sometime soon. I think one way school can set us up for success is if they allocated time for us students to complete these tasks. Like after we were educated on how to budget, open a Roth IRA, Invest, the next class we make that knowledge applicable. Because it is fresh in our minds...just a thought.
ReplyDeleteI really liked this blog piece Cam. I think that budgeting is something that none of us want to do just because we all wish we had endless money and didn't have to save for certain purchases, however none of us have the luxury of endless money and as a result, saving your money, specifically budgeting, is vital. You gave a lot of helpful information and broke up your piece nicely by talking about how to budget and and different tricks to help you create the best budget for yourself. Great blog!
ReplyDeleteI agree that budgeting is very important. In addition, I like how you added the part about savings and how important they are. Creating a budget and budgeting a certain amount of your money for savings can help you immensely in the future. However, it can sometimes be difficult to actually follow your budget especially when, if you use the 50/30/20 rule, you are putting away 20% of your money into somewhere that you won’t see in a while (savings). I would say that if you need to adjust your budget so that it is different from the 50/30/20 rule it would be okay to do so, if it helps you stay disciplined to your budget. However, you should always keep at least a little bit of your budget for savings that can grow in the long run.
ReplyDeleteBudgeting is a needed skill that people really need, but, I did not know that there are apps that can help you budget your money. But I would like to know what apps are helping with budgeting and are the apps doing a good job of doing it.
ReplyDeletei like your topic cause budeting is very important. i didnt know that 33% of people dont budet and thats kinda werid
ReplyDeleteCam, I've recently found myself spending a lot of money. Like a LOT. So, I've been trying to cut down my spending but without any sort of concrete plan or budget, I've been veering off track. I really appreciated how your blog was laid out. It was easy to read. I especially liked your portion on budgeting and the tips of writing it down in a notebook. I'll have to try it out!
ReplyDeleteThis was super helpful!! I feel like sometimes I want to start saving more but don't know where to start or what methods to use. This was great and helped me understand more about the different methods of saving and how to easily use them in my everyday life. Do you think that I could still accomplish a good amount of saved money if I do a 50-35-15 method instead of a 50-30-20?
ReplyDeleteThe 50/30/20 rule is something I have not heard about that I should keep referenced because that is such a good way to save and spend what you need.
ReplyDeleteI agree with you that budgeting is a needed skill and needs to be practiced more. I thought this post helped emphasize how important it is. It was interesting to see the online banking side of budgeting as well. One thing I wondered was what are the long term consequences of not budgeting?
ReplyDeleteBudgeting is a very important step to understand when dealing with money. I appreciate the amount of applications you offer as examples. Each application and person may budget their money differently. What types of budgets are often considered best to implement? For instance, having a six-month goal with various budgets, or a monthly one? Creating wants and needs or dividing it down to food, bills, etc?
ReplyDeleteI like how you gave different options of how to create a good budget weather it was writing it in a notebook or downloading an app that did most of the work for you. I didn't know about the different types of apps that can help you create a budget and it's a good thing to know for the future. Out of these different budgeting options you gave us, which one could you see yourself using?
ReplyDeleteBudgeting is obviously a skill that everyone needs, for me it also happens to be something that I seriously need to work on. Understanding how much money to set aside for different things is very important, I really like the 50/30/20 part of your article. For me, I feel that as a high schooler these numbers are likely slightly different, there aren't a ton of things that I feel like I truly need. I work mostly for savings and to satisfy my wants. I think if I were to set aside 30% for savings, 30% for needs, and 40% for wants that would be good for me. obviously this will change as I move into college but it's interesting to think about how much these things are individual. I feel like as long as people have a well thought out and reasoned plan than budgeting shouldn't be too hard.
ReplyDeleteThis is really helpful! I didn't realize how accessible online banking was. With so much technology, it is becoming easier to spend money where it is needed most. This seems similar to how we can now compare prices in stores with prices online using technology. Because of the increase in accessibility to technology, I wonder if people are buying less impulsively than they were before, and instead planning out exactly what they will buy and from where.
ReplyDeleteAlthough budgeting might not be the most fun thing to do in the world, your blog did a great job of keeping me intrigued by your images and statistics showing us why budgeting is so important. I think it's great that you are giving examples of ways we can use our daily technology like our phones to help us budget.
ReplyDeleteCam, I love how you began your essay with a statistic of 33% of people not having a budget plan. This gave an idea as to why you chose this topic. That is a large number of people and a problem. Along with this we know technology has developed, especially during our generation, so I think it is great that you incorporated technology based solutions. You peaked interest in my mind about IRA's and index funds by talking about the 8% annual increasing. It was interesting to hear about the stock market and how if you become more educated it is a great opportunity to make money. These are all common things that are important to know and learn from as we are growing up and soon are going to be making money more often. One thing that can be improved is your conclusion. I feel as if you could have added a sentence or a few to conclude your well done blog. Overall, great useful and organized information!
ReplyDeleteThank you Cam! The information that you have here is very helpful and interesting! You brought up the 50/30/20 budgeting plan and I think its so smart and something that I want to now try because it seems very accurate in helping an individual budget. I also really liked that you brought up online banking because I currently use it and its so easy to navigate and something everyone should try or use!
ReplyDeleteBudgeting is something that I have always struggled with, and as we get older and older it is something that if you are bad at, is more prominent at your life. This blog was very helpful and made me more confident about budgeting. Something we've learned in class, and you wrote about here is the 50/30/20 tactic. I plan to use this in the future. Thanks for the insight.
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ReplyDeleteThank you for the insight. This article has helped me realize that there is so much technology on our hands, that makes it extremely easier to spend/invest/save money where it is needed most. I feel that as time goes on more and more people will realize this in their own way, and It brings up the question, how will people utilize this advantage in the future?