Next, identify your variable expenses, says Fernández Paulino. Or maybe you're paying for something you could negotiate down or shop around for, like car insurance or cellphone service. To save on housing, consider living with a roommate or moving to a cheaper place (although, if you relocate to a place farther away from the city, factor in transportation costs). "They're harder decisions to make, obviously, but they give you more bang for your buck." They're also often the biggest expenses in your budget, so cutting back on these items is "going to save you so much more money," said Kristin Wong, author of Get Money: Live the Life You Want, Not Just the Life You Can Afford, in a 2019 interview with NPR. That's "anything that's the same amount every month, like your rent or mortgage, car insurance, phone bills and utility bills," says Fernández Paulino. If your proportions are out of whack - say, you're spending way too much of your income on basic living expenses - you may need to slash some of your fixed expenses. Twenty percent should go toward savings and paying down debt. Thirty percent should go toward discretionary expenses like entertainment and clothes. Fifty percent of your take-home income should go toward basic living expenses like housing and groceries. Many financial experts advise people to allocate their budgets using the 50-30-20 method. Life Kit Need a New Year's resolution? Here are 50 ways to improve your life in 2024 Create a balanced budget
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