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Planning a Budget Based on Income – the Must Know

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How to Plan a Budget According to Your Annual Income

At a tricky age, where prices go up while incomes stay the same, budgeting is extremely important in any icome bracket. It can be a little difficult to stick to a budget at first, but with time, it will come naturally to you, and you will be able to live a debt free life. To make that happen, follow the budget tips for your income bracket right here, and start planning your financial future:

20k
Budget planning with a 20k income is the most difficult out of the others because you have to basically cut back on everything, especially if you are in debt. When you plan a budget for a 20k income, start by writing down your basic expenses per one week. You will see that your biggest expense in food, so the next thing you need to do is cut back on items you don't need. Take a homemade lunch to work, freeze leftovers, cut back on going out and search for stores that sell food for less. After you do that, you will be able to trim the fat of other expenses – like transportation, memberships to different places and other things that you don't need on a regular basis.

30k
When you earn 30k a year, you can loosen the purse strings, but not too much. At a 30k salary, you should start saving money in a savings program that is right for you. Set up small savings for different purposes, like a holiday, emergencies, school, etc. If your budget allows it, it may also be a good idea to invest in bonds, which will allow you to have a tax-free cash savings you can easily withdraw whenever you want, with no penalties.

40k
In this income bracket, it's time to pull out a spreadsheet and plan a budget for the long run. Once a week, or at least once a month, sit in front of your computer, open a spreadsheet and write down your expenses. See where you can cut back and save money, and then allocate those extra funds towards your future. Nowadays, you have pension plans where you can contribute to your pension fund, and by doing so, increase the amount you will have in the future. In most cases, employers will contribute 50% of the first 6% you invest in your pension, and you should aspire to invest 12-15 and even 20 percent of your annual income towards you pension fund. If you've worked in other places in the past, use an unclaimed money search to find the money you are entitled to and check if you can consolidate it with your current pension, so that you will have even more money for when you retire.

50k
When you earn 50k a year, it may be a good idea to budget yourself towards buying a home. A house of your own makes for a good investment, so you should start saving for one by cutting back on expenses and having a savings account that will allow you to take on a mortgage.

60k
People in the 60k income bracket should aspire towards having savings for a home, as well as investing money in the stock market, or other investment opportunities. That means you should have a budget set up especially for these savings, and that you should be allowed to spulrge, but not too much. Plan vacations in places you can afford without breaking the bank, don't spent too much money on eating out and going out, and if you do that, you will be able to be a home owner in a few years and not have to worry as much about the future.

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