The statistics are grim.

One in three Americans don’t have at least $500 set aside to cover an unexpected emergency expense. This should come as no surprise, as only 41% of Americans keep a budget.

Living paycheck to paycheck like this may result in more than having to borrow from friends and family to make ends meet, or accruing hundreds if not thousands of dollars in credit card debt. The sad truth is that these less-than-ideal financial situations can also bring on added, consistent stress.

How to avoid all that? By devising a budget — and sticking to it. Rest assured, the easiest way to budget is at your fingertips.

The Building Blocks

Keeping a budget involves more than simply spending a little less than what you take in each month. To prepare one that makes sense for you (and/or your household), you’ll want to figure out what areas of spending to focus on and how much to put into each bucket.

For most people, making a budget begins with core categories like housing, food, utilities, transportation and debt repayment. You’ll want to make sure you put in enough to meet your obligations while also having something left over for emergencies.

The amount to be devoted to housing will vary, depending on where a person lives. Likewise, if you do not have a car, you do not need to worry about auto insurance.

One good rule of thumb is to follow the “50/30/20″ rule, which states that half of your after-tax income should be spent on necessities, 30% of it should go to wants and 20% to savings and debt repayment.

Under the “50%” umbrella, you’ll want to include things like groceries, rent or mortgage, utilities, transportation, insurance, minimum loan payments and work-related expenses like childcare. Your “20%” umbrella should include savings toward an emergency fund, retirement contributions and paying down high-interest debt. Finally, in terms of wants, focus your “30%” umbrella on everything from travel and dining out to a gym membership.

One in three Americans don’t have at least $500 set aside to cover an unexpected emergency expense. It should come as no surprise. That’s because only 41% of Americans keep a budget.

How to Stay Disciplined

Now that you have a budget, it’s time to stick to it. There are numerous ways to keep yourself — and your spending — in check.

  • Automate payments, including those into savings, as much as possible. If your money is being automatically placed into your buckets, or your high-interest credit card payments are being automatically deducted from your checking account each month, there won’t be cash on hand tempting you to spend frivolously.
  • Understand, and account for, seasonal fluctuations in spending. This means that you might need to adjust your budget say, in the summer, when your air conditioning bills are more expensive, or in the winter, when you typically spend more on dining out to celebrate Hanukkah or Christmas, or spend on air travel to fly home for the holidays.
  • Pay attention to how you’re spending cash. Those Benjamins can be a blessing and a curse, allowing you to quickly buy a pack of gum without whipping out your plastic. On the other hand, cash can be hard to track, which means relying on it too heavily can derail your budget. If you use cash, keep track of what you’re spending it on, and make sure your spending habits align with your budget.

Finally, and perhaps most importantly, understand the difference between a need and a want.

Do you “need” to download the new season of your favorite streamed TV show or can you get by with the cable you’re already paying for? How about that daily lunchtime sushi roll? Would you be better off brown bagging leftovers from home?

These are the types of questions that responsible budgeters ask themselves, and they speak to the root of what often gets folks in financial trouble: deciphering a need v. a want. A good starting point is asking yourself: Is this something I need to purchase, or is it something I want to buy? Will buying it hurt my savings? Can I afford it right now?

By asking the right questions, you can keep your budget on track — and establish good habits that will serve you and your finances well for years to come. Over time this will become easier, and you will discover the easiest way to budget for your circumstances.

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