Give Your Budget A Boost

Whether you’re new to budgeting or your current plan is in need of some updates, Education First Credit Union has the resources you need to take control of your spending habits.

One of the simplest and most effective budgeting methods is the 50/30/20 Rule—a practical guideline that makes managing your money easy and sustainable.

This rule separates your after-tax income three ways:

• 50% for needs
• 30% for wants
• 20% for  savings

This is a simple and easy way to keep track of your budget with each paycheck. No matter how complicated life gets, this budget will always be there to simplify your finances.

👉 Use this Banzai calculator to help figure out exactly how you should be dividing your paycheck.

Understanding Needs vs. Wants

Needs

Everyone has different financial priorities, but some expenses are universally considered essential. These include:

Housing: Rent, mortgage, homeowners' insurance, property taxes.

Transportation: Car payment, gas, bus or train passes, parking fees

Insurance: Auto, life, homeowners, health, renters

Utilities: Gas, water, electricity, internet, cell phone

Loan payments: Credit card debt, student loans

Short-to mid-term savings goals: Down payment on a car, a new roof, replacement furnace

Health Care: Insurance premiums, deductibles, prescriptions

It’s also important to note that some needs may not happen regularly and might be something that you are anticipating or preparing for.

Wants

While most people have similar needs depending on their lifestyle, wants are very subjective and personal to each individual. Some people may have a hard time spending money on things they don’t want, but it’s important to spend some of your money on things that make your life enjoyable. Other people may have a hard time differentiating things that are actually wants and not something they need. Below are some examples of wants:

Gym membership, clothing, cable TV/ streaming subscriptions, online subscriptions, furniture, vacations, hobbies, and eating out.

Some items, like clothing, may seem essential—but setting limits is crucial. You don’t need luxury brands to meet your basic needs. Being honest about what you can afford is the foundation of smart budgeting.

Why Savings Matter

A savings account is essential for long-term financial health. Even small contributions each paycheck can make a big difference when unexpected expenses arise.

An emergency fund can help you avoid financial stress during events like job loss or medical emergencies. While it may require some sacrifice now, it can be a lifesaver later.

If you find it difficult to save consistently, consider setting up automatic transfers. This way, saving becomes effortless and consistent.

👉This Banzai calculator is a great resource for calculating how much you could be saving each year. 

Education First Credit Union received funding through a grant from the Ohio Credit Union Foundation to bring you Banzai – a premier financial and life literacy curriculum. Banzai is a free, interactive tool that guides you through various financial topics and scenarios and digs deeper into how you can manage your money smartly and with confidence.