🧾Making a Budget

The end of the month, a peek into the wallet: where did it all go? Money never vanishes — it just leaves without saying goodbye. A budget makes it say goodbye politely: every piece of money gets its assignment before it is spent.

Income, expenses, balance

Money coming in each month is income; money going out is expenses; the difference between them is the balance: balance = income − expenses. A positive balance means the month ended with savings; a negative one is overspending. All of budgeting exists to stop that balance from being left to luck.

50/30/20: three piles

One classic split cuts each month's income into three piles:

• 50% for needs: rent and utilities, meals, transport, school fees — non-negotiable;
• 30% for wants: snacks, games, movies — lovely but optional;
• 20% for savings: put away first, untouched.

Lay out 2000 a month: needs $2000 \times 50\% = 1000$, wants $2000 \times 30\% = 600$, savings $2000 \times 20\% = 400$. If percents still feel shaky, Discounts & Percentages has the full training ground.

Discount %37

37% = 37/100 = 0.37 = 37/100

Treat the slider as your savings rate: parked at 20%, only 20 of the 100 squares belong to savings, and the other 80 go to spending. Slide between 10% and 30% and watch how fast the territory changes hands.

Tracking: where the money went

Budget on facts, not vibes. Record every purchase for one week, then sort the list:

• Fixed expenses: roughly the same each month — rent, meal plan, transit pass;
• Variable expenses: up and down — snacks, entertainment, impulse buys.

The culprits behind overspending almost always hide among the variable expenses. Review those first — before touching anyone's lunch money.

Over budget? Adjust

A budget is not a decree; it is a dashboard you recalibrate every month:

1. Negative balance? Turn the 30% "wants" dial down first — cutting joy is easier than cutting essentials;
2. Needs above 50% for months on end? Maybe the rent is the real problem — that is a bigger decision;
3. Positive balance several months running? Try nudging savings up to 25%.

The savings rate itself is one division: savings ÷ income. Saving 400 out of 2000 gives $400 \div 2000 = 20\%$. And money that sits idle is money wasted — see how it rolls into a snowball at Simple & Compound Interest.

Check yourself

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Quick quiz

↺ Try again

1. 1. Income is 2000 a month. How much does 50/30/20 put into savings?

   200400600

2. 2. You save 300 out of 1500. What is the savings rate?

   15%20%30%

3. 3. Over budget this month — which pile do you inspect first?

   Fixed expensesVariable expensesCut everything in half