Guides / Budget and protection
Building a budget that works
A budget is a plan for your money before the month starts. The best method is the one you'll keep using, so start simple.
The key ideas
- Know your take-home pay
- Start with what actually lands in your account each month after taxes and deductions.
- Track one month
- Before cutting anything, track where the money goes for a month. Bank and card statements make this easier.
- 50/30/20
- A simple starting point: about 50% for needs, 30% for wants and 20% for savings and extra debt payments. Adjust the percentages to your situation.
- Zero-based budget
- Give every dollar a job, including savings, until income minus planned spending equals zero.
- Pay yourself first
- Move savings out automatically on payday so it happens before spending does.
Questions to ask yourself
- Which three spending categories surprised me most?
- Which subscriptions or memberships do I no longer use?
- What is one change I can make this month?
Free help
- CFPB Your Money, Your Goals
- Free budgeting worksheets and tools at consumerfinance.gov.
- Our free Money Playbook
- A printable personal finance checklist and budget worksheet from Pennies & More.
This guide is general education for US households, based on how things typically work. Rules, rates and program details change and vary by lender and state. It is not individual financial, legal or tax advice, and it isn't an offer of credit. Pennies & More isn't paid by any lender or company mentioned here.