Saving · Module 4 of 9
Three ways to divide a month
Three popular ways to budget, including 50/30/20 and envelopes, and how to pick the one you’ll actually stick with.
Key terms in Three ways to divide a month
- Fixed expenses
Fixed expenses are bills that must be paid each month and generally cost the same amount each time. Rent or a mortgage payment, an insurance premium and a loan installment are typical examples. Because the amount rarely changes, fixed expenses are the easiest part of a budget to predict, in contrast to variable expenses.
Source: Consumer Financial Protection Bureau, Financial terms glossary
- Pay period
A pay period is the span of time for which an employer calculates and pays wages. The Bureau of Labor Statistics identifies four common lengths: weekly, biweekly (every two weeks), semimonthly (twice a month), and monthly. Biweekly is the most common among private employers in its survey, and the length varies by industry and by the size of the business.
Source: Bureau of Labor Statistics, Length of pay periods in the Current Employment Statistics survey
- Net pay
Net pay is the amount of a paycheck that remains after taxes and other deductions are taken from gross pay. It is the figure a worker actually receives, and it is often smaller than the amount earned. The gap reflects tax withholding, which depends partly on the information given on Form W-4, and may also include deductions for benefits.
Source: Consumer Financial Protection Bureau, Teenagers and earning
Every term on Lever is in the money glossary.
About this module
Three ways to divide a month is part of Saving, one of 15 subjects in Lever. It’s a short run of 6 lessons, about 15 minutes in all, so you can finish it in one sitting.
Every lesson takes one idea at a time. You read it with the math worked out step by step, answer a question that puts it to use, then see why the right answer is right and why the others aren’t.
It’s for anyone who was never taught this, and you don’t need to know anything first. Every lesson is free. Lever works out what you already know, so you can start here or let your path bring you to it.
More in Saving
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1
The fund that catches you
Build a small emergency fund first, know what really counts as an emergency, and refill it after you use it.
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2
Money with a name on it
Give your savings a job, plan for more than one goal at a time, and work backward from a date to a monthly amount.
9 lessons -
3
So it doesn't depend on a good month
Keep saving even when your income goes up and down, with an honest average and a plan that runs on its own.
5 lessons -
5
Running a tanda
How savings circles like tandas work, what your turn in line is worth, and what to check before you join one.
8 lessons -
6
Money sent home
The hidden costs of sending money abroad, and how to get more of it to the people who need it.
6 lessons -
7
The money that shows up all at once
Make the most of a bonus or refund: decide what it’s for before it arrives, and when paying off debt is the better move.
5 lessons -
8
When your own money buys less each month
Why money that just sits loses value when prices rise, and the one comparison your bank’s ads never show you.
5 lessons -
9
What the app does with your spare change
How round-up saving apps really work, who is holding your money, and the fee that can wipe out what you saved.
5 lessons
Try this module
It’s part of Saving. Lever will bring it to you when you’re ready, or you can go straight there.