Got an Income? 5 Easy Stages to Guide Your Savings

How to budget your paycheck step by step

20%, savings first, one page says: five stages to guide your savings. Here's how each stage works, simplest first.

How to budget your paycheck: take-home pay

Number five: track your money in, the take-home pay left after deductions. That net amount is the one you write in your budget, one lesson says. Count only income you can count on, not bonuses or commissions, one guide says. If it changes, average several months, or plan on your lowest month.

That figure becomes a practical baseline, another page says. If your lowest month covers basic costs, every better month leaves more room to spend or save. One lesson's example: 4,500 gross, 3,500 take-home. By our count, that's about 78% of the gross.

Next, the first place that money goes: you.

Pay yourself first budgeting

Number four: your savings jar first, filled before you spend on anything else. One page calls it paying yourself first. Savings first, then the bills, then the rest, is one guide's order. It says at least 20% of take-home pay, or more if you can.

Another page from the same guide says at least 10%. Saving first is much easier than saving whatever's left at month's end, one booklet says. Say Maya takes home 2,000; by our count, 20% first is 400. Subscribe to catch every practical guide like this one as soon as it drops.

Every rule in this video comes from official pages linked below. Next, the costs that come every month.

Fixed expenses in a monthly budget

Number three: rent and other fixed costs, similar amounts from month to month. Think housing, insurance, utilities, phone and internet. These are the essential expenses that cover your day-to-day living, one page says. You know how much they are and when they're due, so they're easy to plan, one lesson says.

They're paid before any choices about variable spending, like food or entertainment. Needs come before wants, one guide says, because what you want can wait. Calculate the minimum you need each month to cover essential expenses, another page says. In one lesson's example, housing is 800 and transportation is 500.

By our count, that's 1,300, about 37% of the take-home. Next, the costs that don't come every month.

How to budget for irregular expenses

Number two: gifts, travel and repairs, costs that come a few times a year. They come up through the year, but not every month, one page says. Two guides say to add up what they cost over the year, then divide by twelve. Using last year as a guide, one page says, helps you estimate the total.

That page also suggests giving that money its own label, so you're ready when it's needed. Another guide suggests a set amount each month for the unexpected. Or keep a miscellaneous line for anything out of the ordinary, another page says. With money set aside each month, it's waiting when the bill is due, one lesson says.

Say Maya expects 600 a year; by our count, that's fifty a month. Planning is about reducing surprises, so let's see what remains: number one.

What to do with leftover money: savings goals

Number one: goals for what's left, the money one page calls free to use. You can spend it, save it or invest it. Spending it is fine too: one page lists movies, travel and tickets to a game. One guide says to write goals down, with an amount and a timeframe for each.

It counts two years or less as short-term, three to five as medium, six or more as long. The time you have can shape how you plan to save and invest, it adds. One lesson lists long-term goals like a home, tuition, retirement or starting your own business. When your income goes up, one page says to save some of the increase, most if you can.

Say Maya has a hundred fifty left after the other stages; it can go to a written goal. By our count, a hundred fifty a month toward that goal is 1,800 a year. Having savings frees you up to make better decisions, one booklet says. How do you automate every single one of these stages easily?

The next video shows six steps.