3 Simple Budgeting Strategies That Work
There is no silver bullet to budgeting, however I know there is a strategy that can work for you.
Have you tried to budget before and been confused or lost steam and quit?
Maybe you even tried my budget template and it didn’t work?
There are different budgeting strategies that work for different people and that is ok. Several readers asked me about other budgeting strategies, so I thought it would be a good post that may help you.
1. Cash Budgeting
Cash budgeting is the "Dave Ramsey approach", he talks about this strategy in The Total Money Makeover. His reasoning is that cash hurts to spend opposed to just swiping your card. He recommends an envelope approach, where each week/month you put the allocated amount of money in its specific envelope (gas/eating out/etc.) As you spend money in each category you will have less and less in each envelope. If you can’t fight the urge to swipe your card this may be an option for you.
**Some people don’t feel comfortable carrying around a bunch of cash. An easy “hybrid” 🙂 version is to use your debit card and manually track your expenses on a notepad, instead of in envelopes, this is what I did when I was paying off debt.
2. Cyber Budgeting
Some popular budgeting apps are Mint or Every Dollar. These will allow you to spend money and minus the amounts for you electronically. For me I still didn’t feel accountable for my spending when I used these options, which is why I still write down everything I spend on a note pad. However, just because I do it one way doesn’t mean it is the only way.
Through the apps, once you setup a budget you can insert the allocated amounts into each category and the app will do the tracking and math for you.
This could be a good option if you are not super organized or analytical. I would caution you to set a reminder on your phone once a day or a couple times a week to make sure you check it and really use the tool. DON’T JUST SAY “I AM BUDGETING AND IT’S NOT WORKING PHIL!” There needs to be some accountability here. LOL
Related Post: 3 Sneaky Budget Killers
3. Time Frame Budgeting
The other varying strategies come in the form of time frames. We all know that we make X amount each year, however our bills are usually broken down monthly. When you look at life budgeting there are yearly, monthly, weekly, and daily expenses.
What I have found is that, for me, budgeting personal expenses like eating out, gas, groceries, etc. are easier to budget for weekly. Some people do a monthly budget for those expenses too, for me it got too complicated.
You can budget weekly, monthly, or quarterly. I would recommend monthly or weekly because it gives you more control and ability to make changes as you go.
Here is the budget template I use.
For yearly expenses I would still recommend setting aside a monthly amount. For example, if you pay your auto insurance on a yearly basis (it is usually cheaper this way), set aside the monthly amount that will give you your total insurance payment in a year. If your insurance is $1200 a year, set aside $100 a month for it.
Regardless of what your strategy looks like, budgeting is the key to your personal finance success. Maybe you try out one way and it doesn’t work, try another way until you figure out what system works for you.