List all the monthly expenses
I think, you already now that. You must know very well about your expenses. Where did your money goes and why.
Leave some money for savings
My personal ambition to save 15 -20 %. After paycheck take this money to save place.
80 – 85% of paychecks are great too.
What do you win? You do not need anymore credit cards, small debts. All stuff you will buy by your own cash. Interest rates will be no more important.
Example, buy a car or a bike for 3000 euros in cash from savings. Interest rates for consume credit should be about 12-13 % in Lithuania. You save at least 1000 euros*. If your debt payment is annuity for 60 months you will pay about 4000 euros.
Do not take your money to financial institutions:
Most world people are paying interests to financial institutions all the time. Mortgage, credit cards payments, leasing etc. Pay out your debts and don’t come back in this round circle.
So how to create a family budget from that 80 % of your salary??
Make a plan
all this fields you should include in your expenses plan. No saving field? you already did it 🙂
Popular budget rule:
The 50/30/20 budget
50% of salary for your needs: grocery, rent/debt, insurance, housing, utilities, transport.
30% of salary for your wants: shopping, hobbies, restaurants.
20% of salary for savings for repaying debt, emergency fund, retirement accounts, savings for bigger stuff: cars, bikes, phones, computers etc.
This is simple plan, but very effective.
If you do not have a plan and even do not want to have it, there is one simple think. After paycheck you should think twice about current month purchases. Can you afford some stuff or not. Example, if you buy this month Iphone with cash, do you have enough money to live till next paycheck? If not, you can not afford this phone. Or you can save money for that few months. Most important think, do not use credit card 🙂