Another method, he suggests, involves an 80-20 divide, with 20% of your paycheck allocated to your savings and the remaining 80% allocated to spending related to your needs and wants. The idea is ...

This method breaks down spending into three components: needs, wants and debt repayment or emergency savings. You allocate 50% of your budget to needs, such as housing, utilities and groceries.

“Tracking your income and spending, then categorizing into wants and needs gives you a baseline. Layering in your goals — like saving, recurring expenses or paying down debt — lets you see ...