How to budget your money

50/20/30 method can help keep your finances on track


When trying to figure out how much money you should be putting towards bills, savings and spending each month, one popular method is the 50/20/30 rule.

Under this method, you should spend no more than 50 percent of your monthly income on necessary costs. This includes rent or a mortgage payment, utility bills, transportation and groceries.

Once you’ve paid for your necessary costs, you should put 20 percent of your monthly income into your financial goals. This can be for paying down your credit card debt, student loans, retirement contributions and even a goal of saving for a larger expense, like a vacation.

Lastly, you should allocate no more than 30 percent of your monthly income to flexible spending on lifestyle costs. This can include going out to eat, shopping and entertainment. It also includes bills for unnecessary items, like cable and cell phone bills