Budgeting 101: Where Smart Saving Starts 💡

Creating a budget isn't about restricting yourself. It's about giving your money direction. Whether you want to build savings, pay off debt, or just stop wondering where your money went each month, a budget is where it all begins.

Step 1: Know What You Earn and Spend

You can't build a solid budget if you don't know your cash flow.

Do this first:

• Add up all your income (after taxes).
• Track every expense for one month, including rent, groceries, takeout, and subscriptions.
• Use this to get a baseline of how much you spend and where.

Step 2: Break It Down with the 50/30/20 Rule

This simple rule helps you allocate your money in a way that covers your needs and your goals:

• 50% Needs: Rent, utilities, groceries, minimum debt payments
• 30% Wants: Subscriptions, dining out, hobbies
• 20% Savings: Emergency fund, investing, extra debt payments

You can adjust this based on your lifestyle or financial goals. And if you're not hitting these targets right away, that's okay. The important part is building awareness and taking small steps forward.

Step 3: Pay Yourself First

Instead of saving what's left over, flip the script. Prioritize your savings like you would a bill.

Try this:

• Set a goal: How much do you want to save per month?
• Move that amount into your Cove account as soon as you get paid.
• "Spend" it on a decoration to stash it away and make saving feel rewarding.

Your future self will thank you, and your money stays accessible if you need it.

Step 4: Revisit and Adjust

Life changes, and so should your budget. Schedule a monthly check-in to:

• Compare actual spending vs planned
• Adjust for unexpected expenses or new goals
• Celebrate wins like staying on track or saving more than expected

Budgeting gets easier the more you practice. And with Cove, your progress feels rewarding along the way.

Bonus: Alternative Budgeting Styles

Everyone’s financial style is different. If the 50/30/20 rule doesn’t fit you, try one of these:

Zero-Based Budgeting

• Every dollar has a job. Income minus expenses (including savings) equals zero.
• This method works great for people who want structure and full control over where every dollar goes.

Envelope Budgeting

• Allocate cash to physical or digital envelopes for each spending category.
• When the envelope is empty, no more spending in that category until next month.
• It's a visual and tactile way to stick to a plan.

Test what works best for your mindset and money habits.

Final Takeaway

Budgeting isn’t about giving up everything you love. It’s about creating a system that works for you. When you budget with purpose, every dollar goes further and your goals start feeling a lot more reachable.

Start your journey by opening a Cove account and putting your savings to work.