Hey all!
Just some context: I'm an E-3 a little over a year into my first enlistment, currently living in the dorms with about 3k in savings in a HYSA. 10% of my pay is invested in TSP.
I browse this subreddit a lot, and I spend a lot of time fantasizing about my financial future but have only just realized that I don't have the building blocks to do much of anything right now, AKA a budget! So far, I've just been eyeballing my paychecks and deciding how to divvy it up then and there, and as you might be thinking, the amount I spend versus the amount I save fluctuates greatly month by month. Most of my money goes towards splurging and wants.
I just sat down and got my average take-home pay using all of my LES statements for 2024 and divvied my monthly income into the 50/30/20 budget guidelines and this is what I came out with:
Average Take-Home Pay = $1749
50/30/20
Needs = $875
Wants = $525
Savings = $350
This is all fine and dandy, except that my needs are mostly met by living in the dorms or being in the military (health and dental are covered, I have a roof over my head, etc) and all that's left is a car payment/insurance, internet, gas, and my phone bill which totals to around $450 a month, which is nearly half of what this budget would have me set aside for those expenses. I'd have a little over $400 "leftover".
So I guess my question stems from that leftover cash. Should I leave it be? Put all the extra in savings? Divvy it up between wants and savings? Or use it for something else entirely? Or maybe this entire budget isn't any good and will be hard to follow?
Thanks in advance and sorry for the long post.
Is this budget doing too much or not doing enough?
byu/Vividokami inMilitaryFinance
Posted by Vividokami
1 Comment
The 50/20/30 plan doesn’t make much sense for you because you’re not paying rent or needing to buying food.
Instead, I would start by setting goals. For example, I want to retire in X years with $Y per year. I want to have $X for travel by next year. I’m planning to spend $A at Christmas/holiday leave block. I want $B in savings for getting my first apartment in a few years. Also, think about your current needs, bills, and habits. Finally, decide how much should go to each thing. If you have more money leftover, decide if you want to accelerate one of your goals or increase spending on a want. If you can’t fit all your plans in, you’ll have to look at adjusting a goal.