✨ The Only Budget Number You Really Need To Know

Sponsored by Fizz

Whether you’re currently in college, just graduated, or are simply finally getting your financial life in order, welcome to our latest series, The Back-To-School Budget. For the next four weeks, we’ll be getting back to financial basics, from figuring out a savings plan that actually works, to finding more flexibility in your day-to-day spending. And thanks to Fizz, you can start building credit as you master all the basics of managing your money.

When you start getting serious about your finances, it’s hard to escape the sense of overwhelm. This is especially true if you’re creating a budget for the first time ever, debating with yourself about how much makes sense to allocate for going out vs. gas every month. 

Over time, you’ll start to realize that the specifics of your budget don’t actually matter — you don’t need separate budget categories for your groceries vs. your Sephora runs. As long as you’re spending below your means and getting on track towards your financial goals, the way you choose to budget simply doesn’t matter. And sometimes, simple is best. Which brings us to:

Today’s task: Calculate your core “budget number.”

Instead of creating a hyper-detailed budget, especially if sticking to one has never worked for you in the past, try figuring out your budget number — i.e. the discretionary spending target you need to stay under in order to live within your means. For instance, say you’re taking home $1500 a month, and your fixed expenses add up to $800 a month. As long as you keep any other spending below $700 a month, you will never spend beyond your means. 

To break this down further, use these steps to calculate your own monthly budget number:

• Add up all of your fixed monthly costs. These are costs that don’t fluctuate, such as:

  • Rent

  • Internet/phone bill 

  • Car payment

  • Public transportation pass 

  • Insurance

  • Tuition payment

  • Streaming services/subscriptions 

  • Gym pass or other memberships

  • Debt payment

  • Etc. 

  • Total fixed costs: $__________

• Add up your total monthly income. If your income tends to fluctuate, go off either your average monthly take-home pay, or the lowest pay you could expect to receive in a given month.

  • Average monthly take-home pay: $____________

• Calculate what’s leftover. This is your “budget number”: as long as you stay under this number, you’re golden. 

  • Monthly income $____________ - fixed costs $____________ = $____________ ← your budget number

Keep in mind that your core budget number will have to accommodate both necessities and non-necessities — groceries and gas, for example, aren’t included in your fixed costs, since those expenses likely vary from month to month. Don’t confuse your budget number with YOLO spending!

This is, admittedly, a very simplified way to budget; things get a lot more complicated when you start to factor in future debt payoff, savings goals, or irregular expenditures. That’s where Fizz comes in. Fizz is the #1 credit & money app for young adults. Whether you want to build credit, manage your money or have no idea where to start, Fizz is there to help you every step of the way.

One of our favorite features from Fizz is their credit-building card with built-in budgeting. There are no interest rates, late fees, or minimum deposits to worry about — and no credit checks or cosigners required. Fizz puts smart limits on your spending by connecting to your bank account so you won’t go overboard (without you having to think about it). And it’s automatically paid off from your connected bank account every day so that you don’t build up a big balance throughout the course of the month. Users also get real-time spending insights, access to budgeting tools, real-time credit monitoring, and more. 

Take the guesswork out of your spending and join over 100,000 members to kickstart your financial journey. Click here and use code TFD to get your 30-day free trial of Fizz!