You are creating a detailed road map for your finances before you actually start spending anything. The rationale behind this method is that once every dollar has a job, there is no money left to waste on unwanted expenses. Suppose you earn $2000 a month, your savings, spending, investment, charity, gifts and every other outflow put together should equal $2000. This means you have a clear idea where every unit of your money will go, finally narrowing down the difference between your income and expenses plus other outflows to zero. This method has been popularised by personal finance guru Dave Ramsey and boasts fanatic followers around the world. Zero-based Budgets or When You Give Every Dollar A Job Envelope Budgeting or When You Put Away Money For Major Expenses Or, they could be an inspiration to even create your own method. You can use this as a starting point to figure out which (or what combination) of these methods listed below might work for you. Here’s a list of the simplest five methods to budget (or not budget in some cases). So here you go… 5 Simple Ways To Budget And Stay In Control Of Your Finances The budgeting method you pick should be simple and something that you know you would stick to.īecause, budgeting is not meant to be a pain. Likewise, someone with a bad memory may want to track their spending on the go rather than making a note of all their transactions together at the end of every week or month. You are only setting yourself up for failure.Īnd, in case, you are at the other extreme and love to dig deep into your bank statements, then a budgeting method that asks you to save 20% and not care about how you spend the rest would put you in an uncomfortable space. If you are not detail-oriented, then following the advice of someone who asks you to account for every cent you spend may not be the way to go. Your budget should represent your goals and should cater to your preferences, not that of the ‘dude who saved 80% of his income, retired early and is now travelling the world’ or the ‘stay-at-home-mom who runs a blog and makes money while she sleeps’. Just because a budget or a budgeting style works for a few people, it need not work for you. “It worked for someone else” is never a good reason to follow a particular budgeting method. The answer to this is embedded right in that question. But have you really thought about why your budget didn’t work for you when it did just fine and sometimes even really good for someone else? Why Isn’t Your Budget Working?įor those of you who are exhausted by budgeting, we know it’s hard to convince you about its benefits. And, if your budget only complicates things, then you might as well get rid of it, right? But Wait…. If your budget is only pumping up your anxiety levels, then we don’t blame you for abandoning it. So, if your budget does none of this, then it is clearly not working for you. Feeling more in control, happier and calmer. It should decrease the stress and anxiety that comes with not having control over your finances. If you answered yes to one or both of these two questions, chances are thatĪ budget is meant to simplify things for you. Cumbersome.Īre these the first words that come to your mind when your hear the word ‘budget’? Does your mind conjure up images of complex spreadsheets, continuous note-taking or repeated balance checks?
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