5 Budgeting Techniques to Try

5 Budgeting Techniques to Try

Are you keen on cleaning up your finances this year? Setting up a budget is the first step to try. But it is wrong to assume that there is a budget that fits everyone. In reality, there are different budgeting techniques that will fit a variety of people. Below are some options that you can try today.

1. Traditional Budget

An old-fashioned strategy but it works for some people. You simply list your income and expenses and find the difference. Then, you set goals for how much you want to spend in every category. This method works best for people who are detail-oriented and who are not too busy.

2. 50/30/20 Budget

This simple plan breaks down your expenses into three categories: needs, wants, and savings. 50% of your salary goes to needs, 30% are for wants, and 20% are placed in savings. The most important point here is to identify what needs are and not mistaking wants as needs.

3. The 80/20 Budget

In this strategy, you save 20% of your money and spend the rest. You can use it for emergencies, home repairs, or buying a car. This method is easy because you simply take out your savings and do not have to worry too much about the rest.

4. The Sub-Savings Account Budget

In brief, you open multiple savings accounts and assign a specific goal for every account. For example, you can set one up for a vacation and another for the down payment of your first house. Set a goal for each account and divide your money as they come to reach your goals following your timeline. You can even set up automatic payments to go to each account to streamline this method further.

5. Budgeting Tools and Apps

Obviously, this is not a budgeting strategy but it helps in organizing your money. Whatever budgeting technique you follow, you can enlist the help of budget apps and tools to make your financial life easier. This works out for many people today because they like the convenience of technology in helping them track where their money goes and move funds anytime as they please.

Ian Schindler