By now, you’ve probably heard someone wax poetic about the importance of managing your money and controlling your finances. But despite the fact that it is an important life skill, spending money is not something we are taught in school. And unfortunately, most of us are paying for that now.
That said, while budgeting can help you reduce your monthly financial struggles and live a healthier lifestyle, finding the right one for you is often easier said than done. After all, there is a plethora to choose from, and it can be frustrating when they don’t fit your lifestyle and needs.
If you’re sick of leaving your budget tool after a few days or want to finally get hold of your money, you’ve come to the right place. With one of these budget plans, you can manage your money, stay on track, and reach your financial goals. Continue reading to learn everything you need to know about 8 awesome and easy budgeting strategies.
1. 50/30/20 budget
The 50/30/20 budget divides your monthly income after taxes into three parts: 50% for necessities, 30% for necessities, and 20% for financial goals such as savings, investments and down payments. debt. This budgeting system is great for those who want to track where their money is going or manage their spending without worrying about restrictions. It can be modified as needed; If you want to focus on paying bills and generating income, you can make a 30% income goal and a 20% wish.
To start, figure out your monthly income after taxes, and use this NerdWallet’s free calculator to figure out what the 50/30/20 budget should be. Once you get those numbers, it’s up to you to take care of yourself. Of course, this can be a challenge for people who have difficulty controlling their spending, who have a complicated financial situation, who live in expensive places, or who paid in debt. However, review your expenses and a budget template or applications such as Mint that place makes things easier.
2. Paying-off-your-own expenses first
Paying yourself the first budget is exactly what it sounds like—you put money into a savings account first. To build this budget, write a list of your savings goals; building emergency and retirement savings, saving for a down payment on a home, and paying off student loans or credit card debt are some common examples. Then, use your credit card and bank statement to figure out your total monthly expenses and subtract that number from your income when you do your monthly taxes. From there, take the money you have left and allocate it to your goals as you wish.
When done right, this budgeting process can help you quickly track your short- and long-term goals and avoid piling up debt and overspending. However, this process will be easier for those who have more money; when you don’t have a lot of room to move around, it can be difficult to store. Just try to remember that saving a little is better than saving nothing at all. And setting up automatic transfers into your account and investment portfolio, as well as automatic 401(k) withdrawals from your employer, can save you time and energy.
3. The Envelope System
It’s hard to understand how much money you’re spending when you can’t see or feel the money leaving your hands. If you’re a smart spender, consider investing in an envelope. This money-based approach divides your money into different types of expenses by creating a money envelope with a specific amount. You have to do it with every envelope, and once the money runs out, you have to finish it until the next month. It’s a great way to develop self-control and be more aware of your budget.
That said, while this approach can prevent credit card fees and overdraft fees, the worst part is that you may miss out on opportunities to improve your credit score or use the credit card as cash back, travel expenses , etc. So if you want to use your credit cards, consider using them Good budget. It is one of the best budgeting apps and uses modern methods and envelope systems.
4. Zero-based budgeting
If you like paper and numbers, zero-based budgeting (ZBB) might be the move for you. This system encourages you to allocate every penny of your monthly income towards your needs, wants and financial goals. The main difference between ZBB and other budgeting systems is that your balance should be $0 at the end of the month – a sign that you have paid for essentials, helped with financial goals, and allowed you to spend around the house. ‘There is no further charge.
ZBB is great for raising money awareness and when and how money comes into your life. But make no mistake: It is time-consuming and exhausting. It can be a challenge if your income varies or unexpected expenses arise because you have to move the numbers. If you want to try this method, print it out for free Type ZBB or sign up for the best zero-based budgeting app, YNAB.
5. The shortest path
A minimalist approach to money means being careful with your spending and living below your means. Instead of focusing on where to spend your money, you invest it in the things that matter most to you and help you build a financially and emotionally rich life. For this reason, this method works best for those who already control their spending and know what their basic values are.
To understand what your core values are, write a list of what is most important to you (think: family, freedom, and more). This will show you where you should be spending your money. For example, if family is important to you, you can focus on traveling to see them more often. Likewise, look at your expenses and see where you can cut back and save. Minimalists are not overwhelmed by excess anywhere in their lives, and that includes money, too.
6. Non-cash budget
Constantly stressing about what to spend and save can be exhausting. Enter: budget without budget. Unlike the traditional budgeting method, this method has you paying all of your expenses at the beginning of the month. Then, you put a percentage of what’s left into savings and debt payments and use what’s left of that as you wish.
A no-spend budget will work well for someone who doesn’t like a restrictive budget. It is also good for those who want to focus on saving their money for a short period of time to reach their goals. To know this, try to adjust your salary and the percentage of your salary in the savings and retirement fund at the beginning of the month; You will be allowed to spend money to act on your ideas.
7. The Kakeibo Method
Kakeibo is a Japanese budgeting system Journal of Budget Management. In it, you track your money and expenses, set and work towards financial goals, and improve your relationship with money. Similar to other budgeting systems, Kakeibo allocates a percentage of your salary into four categories: needs, wants, habits (like media work), and unexpected expenses (AKA emergency funds).
Also, at the end of each month, sit down and record your answers to these four tips to make your financial goals and ways to improve.
Asking to respond to your Kakeibo newsletter:
- How much money do you have?
- How much do you want to save?
- How much do you spend?
- How can you improve?
All in all, anyone can benefit from this important method of money management. No matter how much money you have, there is always room for improvement.
8. Automatic spending
Contrary to popular opinion, investing in a budget doesn’t mean kissing the price right. Similar to automatic savings, automatic spending keeps the “spending” portion of your paycheck in its own checking account each month. You can use a debit card for the account or withdraw money from it to use however you like. Just make sure you have an overdraft protection or stoppage system that prevents you from overdrafting (like rejecting your card, etc.) in place.
This method will probably be most useful for the girl who is interested in shopping. It will create the necessary safeguards to stop them from withdrawing from their bank accounts and allow them to spend money at the same time. Likewise, they will be more aware when they spend money, which will help them save more money.