How should i allocate my income

If your employer offers a program to match some of your contribution, try to invest enough to take full advantage of the program. Your personal budget is a living document that can help you understand and control your spending. At the beginning of each month, make adjustments for what you expect to earn and spend that month. Update the budget throughout the month, and use it to help create the budget for the next month.

Catie Watson spent three decades in the corporate world before becoming a freelance writer. She has an English degree from UC Berkeley and specializes in topics related to personal finance, careers and business. While you won't find a magic formula that sets out hard-and-fast rules for divvying up income , financial planners offer several possible ways to budget. Housing takes the largest amount out of your income. Common financial advice is to use no more than one-third of your paycheck for rent or for mortgage payments, insurance and taxes if you own a home.

After that, what you do with the rest depends on your situation. One popular paycheck allocation formula is:. Massachusetts Senator Elizabeth Warren's budgeting guide is called the rule, and some experts love it.

The basic idea is to divide your paycheck into three categories: needs, wants and savings. Remove some to bookmark this image. You are now subscribed to our newsletters. Premium Premium How 15 X 15 X 15 rule of mutual funds can help you beco Premium Premium How to get your insurance related complaints resolved t Premium Premium Here are some handy tips for fixing your poor credit score.

Subscribe to Mint Newsletters. Internet Not Available. As you think about why you're investing, consider a platform that can help you visualize your goals. For example, users of robo-advisor investment platforms like Betterment and Wealthfront can receive personalized savings plans that are calculated based on their indicated investment time horizon, risk tolerance and projected return of their recommended investment portfolio.

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