Budgeting can involve making a comprehensive list of expenditures or focusing on a few categories. Some people prefer to write their budget out by hand, while others use a spreadsheet or budgeting app. There’s no correct way to budget — what works for one person might not work for another.

That said, the 50/30/20 budget is one of our favorites. This method suggests you spend about 50% of your monthly after-tax income on necessities, 30% on wants and 20% on savings and paying off debt.