A short guide to budget planning

Why is budget planning important?

Why is budget planning important? Following a budget plan can help you take control of your money, showing you where your money is going and whether you have enough to pay any expenses.

One way to create a budget plan is by following the 50/30/20 rule, which involves dividing outgoings into three categories: needs; wants and savings. We’ve created a quick guide to help you get started.

Needs = 50%

50% of your after-tax income to go to your needs, such as: housing; transportation; insurance; groceries; and healthcare.

Wants = 30%

A further 30% of your after-tax income can go to your wants, such as: takeout dinners; new gadgets; concert tickets.

Savings = 20%

And finally, you could leave 20% to help you prepare for your financial future e.g. paying off debt and building savings.

Use our Budget Planner

Get in control of your spending, try out our simple budget planner. To make your results more accurate, try get as much info together as you can before you start, such as bank statements and bills. Use our free budget planning tool today – https://serveandprotectcu.co.uk/borrow/budget-planner

  • The information provided in this article is for guidance and educational purposes only. Police Credit Union Ltd. does not offer regulated financial advice. Please seek independent financial advice.

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