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Are you rethinking your spending habits?
You have budgeting problems?
Trying to make your dollar stretch?
Aren’t we all? It’s like we’re all in the same boat! Budgeting challenges are real, and they are a mighty struggle for most people. This economy makes it tough to save our money while keeping our dreams and goals in sight.
Feeling like your budget skills are lacking? First, you have to change how you look at budgeting. Navigating budgets can be like a maze, especially like the ones with no end in sight. Don’t think about this as being restrictive but see it as a roadmap to your financial freedom. Let’s do this!
When you’re in control of your money, not the other way around, every small step is a leap towards a better future. Here’s 10 ‘No Fail’ budgeting methods that will empower you and help you take control. Fear not! You can only fail if you don’t act. Five of these methods are old fashioned, yes. But they are tried and true. Act NOW!
TRIED AND TRUE METHODS:
1. Envelope System Method
Want the Gold? Use the Old! An oldie but goodie here – this method involves dividing your cash into envelopes (you can choose what ever size, color, or shape of envelope that you want, it matters not). Each envelope is named for a particular purpose and once that envelope is empty – yep, you guessed it, no more spending till the next payday allotment. This is your cue to stop over spending in that category and your real-time chance to reflect on your lifestyle. With this method, you can’t just swipe a card and get what you want because you want it. It’s perfect for those who like to see, know, and feel where their money is going.
2. Cash-Only Spending Method
Another oldie, but goodie! Some people find themselves in financial trouble from excessive overspending that may or may not have caused an unaffordable number of overdrafts. It happens, even to the best of us, and it’s easily done, unfortunately. When you look at your bank account electronically, it only depicts the balance of things that have cleared your bank account. It does not account for those that are still outstanding or have been set up as automated and come out at a later point. If you’re still writing checks, then you should still be documenting everything that you spend in your checkbook ledger. If not, you can and will most likely find yourself in overdraft trouble. Solution – ditch the debit/credit cards, just for now. Write down all your bills and keep only that amount in your checking account and pull the rest out for cash spending. This is a very visual way of seeing just how much you have spent and how much you have left to spend.
3. Ledger or Journal Method
This method is awesome for the Pen & Paper lovers. This involves writing down and tracking every penny that comes out of your paycheck. It is as detailed as you want to document. This also gives you a clear picture of your spending habits over time. It’s also good for those that have decided to cut down on costs in order to pay off debt, such as internet expenses. Plus, there’s something truly and deeply satisfying about putting pen to paper. (By all means, if you’re more tech savvy, then set up a google spreadsheet.)
4. 50/30/20 Rule Method
Like simplicity or a balanced approach? Put 50% of your income towards your needs (food and shelter). Then, put 30% towards your wants (clothing, vehicle, or self-care days). Last, put 20% towards savings or debt repayment. This may be a good method for those that need to ensure all your bases are covered without making budgeting feel like a chore.
IN-OVER-YOUR-HEAD METHODS:
5. Zero-Based Budget Method
Each dollar needs a job! At the beginning of each month, set aside a time to give every dollar of your income to specific expenses, savings, and debts until you end up with zero dollars at the end of the list. This type of accountability ensures that you don’t just mindlessly start spending. You know at the beginning where your money has to go.
6. The Subtraction Method
Start with your income and subtract your expenses until you reach the end or zero. Make a list of your necessities first and work your way down to the wants. In other words list shelter and food first and television streaming services or entertainment such as nights out, last. Talk about a simple and straightforward method. You either have money left over or your totally in debt and need a second income. Focus on what income you have left (if any) after your obligations are met. Fulfill your needs first and then your wants.
7. Apps and Digital Tools
Yeah, there may be an app for that! However, use it with caution! Use ONLY if they are FREE or AFFORDABLE! Not every app or digital tool is free, and you better know if you can afford it before you download and use it. These apps sync with your bank account(s) and track your spending automatically, offer real-time insights, and may even help you set and reach certain financial goals. But they don’t teach you how to budget. They only help you realize that you may still have a problem. While these are doable, they’re not highly recommended.
I-GOT-THIS METHODS:
8. Pay-Yourself-First Method
For those that need a different approach, this flips traditional budgeting on its head. With this method, you set aside money for your savings or investments first. It’s like giving your future self a high-five. Aim for around 20% of your income to be placed into savings. Or start with what feels doable like 5% or 10% of your income. Building a good, consistent habit is the point that matters most. Feed today’s needs and build tomorrow’s dreams. Every dollar you save now is a step towards your future’s financial empowerment.
9. Automated Budgeting
Recommended for those that must live in a cashless society. Not worried about where your money is going because you’re already frugal? Are you just wanting all bills paid before everything else comes out? Then setting up automatic transfers for bills, savings, and investments, is the way to go. This method takes the guesswork out of budgeting. It also helps ensure that you never miss a payment or forget what is owed.
10. The Value-Based Budgeting
With this method, you put your personal values first. If you can afford to put yourself first, then why not! This includes prioritizing travel, hobbies, or family. It’s about spending your hard earned money on what truly brings you joy and fulfillment. If this method fits your unique financial situation and personality, go ahead, and live your life to the fullest.
There you have it! When embarking on a budgeting journey it’s all about embracing your needs. Which ever one you choose, stay consistent with your steps towards financial empowerment. Tweaking daily expenses will help navigate these horrible economic ups and downs.
You’re not just managing money; you’re crafting a life you love. Each decision and penny saved is a testament to yourself of strength and foresight. Watch now as these little seeds sow into financial wisdom and bloom into a garden of security and freedom. You’ve got this!
Dawn Corbett is a driven, self-motivated, elementary educator, and a molder of young minds. She has taught in public education for twenty plus years. Creating original content is something that she is passionate about and gets excited about. She knows the value of confidentiality, cooperation, and being a team player. Working as an editor and blog writer has given her a valuable opportunities to develop her own intellect and a different perspective on how to respectfully communicate with others in different styles.