![]() ![]() This allows you to spend within a budget (i.e. Set monthly debt payments into your necessary living expenses. ![]() If you're trying to build a credit history living on a budget can help. Setting and sticking to a budget will help you avoid getting into debt and it will help you start paying off your existing debt. Spending more than you earn is an unhealthy habit because it leads to debt. If you're living without a budget you may be living beyond your means. From there you can see how to reallocate your spending to make sure your monthly bills are paid and you're saving towards your goals. Use budget software or an app to help track your spending over the next 30 days. If not, you'll have to cut out unnecessary expenses or start earning more income. So how do you get started? Start by tracking your spending to see if you're currently living on a 50/30/20 budget. The other 20% of your income can be saved for short-term goals such as a yearly vacation, as well as your emergency savings fund. It allows 50% of your after-tax income to be spent on necessary living expenses such as housing, utilities, and transportation.ģ0% of your income should be tucked away for long-term (more than five years) goals such as retirement or buying a home. From there you can determine your expenses. The first thing you need to know is how much after-tax income you're bringing in. ![]()
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