How do I create a personal budget that I can actually stick to?

To create a personal budget that you can stick to, consider the following steps:

1. Calculate After-Tax Income: Determine your monthly after-tax income, which is the amount that actually reaches your bank account after deductions.
2. Track Spending: Track your spending for a month or two to get a clear picture of where your money is going. You can use bank and credit card statements, budgeting apps, spreadsheets, or a notebook.
3. Categorize Expenses: Use the 50/30/20 framework to categorize your expenses into needs, wants, and savings/debt repayment.
4. Analyze and Adjust: Create a target budget and align your spending with the 50/30/20 rule, or a variation that works for you. If your "Needs" exceed 50%, look for ways to reduce costs, such as housing, transportation or groceries. If your "Wants" are over 30%, identify discretionary expenses to cut back on.
5. Put Your Budget into Action: Use a system to follow your new plan. Automate savings by setting up automatic transfers to a savings or investment account. Automate bill payments for fixed needs like rent and utilities.
6. Monitor Regularly: Review your spending and compare it against your budget at least once a month and make adjustments as needed.