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Bring A Balanced Budget To Your Life

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Financial experts say defining a personal budget could make all the difference when trying to meet your financial goals. NY1's Tara Lynn Wagner filed the following Money Matters report.

During election season we hear a lot about budgets. We expect the government to have one and to balance it. But what about ourselves?

"Less than 22 percent of the country actually has a budget. So when you think about what that means it means a lot of people are running around uncertain of where their dollars are going or uncertain of how they are going to pay next months bills," says Founder and CEO Alexa von Tobel.

In fact, Farnoosh Torabi, host of Yahoo's Financially Fit, says roughly half of Americans are living paycheck to paycheck. Establishing a budget, she says, could help them find a little breathing room.

"The purpose of a budget is to really maximize your hard earned dollars so that at the end of the month you have spent appropriately and you have saved appropriately and not only are you taking care of your needs for today but also your needs down the road," Torabi says.

Von Tobel breaks it down into what she calls the 50-20-30 rule. First she says you want to keep your essentials to no more than half of your take home pay.

"That's your rent/mortgage, you're groceries, your utilities and how you get to and from work," Von Tobel says.

Those immediate needs covered, you can start looking ahead.

"You're working now to fund your retirement, so 20 percent of what you are making right now should go to your future," adds Von Tobel.

And that also includes bulking up your emergency fund. Stick to that breakdown, and you should have 30 percent leftover for lifestyle items.

"For fun, for you, for splurging, for going to the movies, going out to eat," Torabi says. When a budget is executed well there is room for needs and room for your wants."

If you're barely making ends meet, the idea of 50-20-30 may seem impossible, but that's where having a budget really helps. There are plenty of free online budgeting tools,'s My Money Center, that will link to your accounts and track your spending for you. It's an eye opening experience and a necessary one.

"Look at the small purchases as well as the big purchases because a lot of little purchases add up and the only way you're going to be cognizant of that is to go back and look at a month's spending," Torabi points out.

"They'll be surprised by some aspect of their spending, whether it's eating out or shopping or how much they are really spending on something like transportation and gas," Von Tobel adds. ClientIP:, UserAgent: CCBot/2.0 ( Profile: TWCSAMLSP