5 Different Ways to Budget: Find One That Works for You!
Today, let’s dive into something that is near and dear to my heart: budgeting. Now, I know the word "budget" might make you cringe, but trust me, it doesn't have to come with negativity and restriction. In fact, I firmly believe that budgeting can be as unique as you are. So, let's dive into five different ways to budget that can suit your style and help you take control of your finances. Find one that works for you or mix and match based on what will work for you.
If you try something that doesn’t work, don’t give up; switch up the things that aren’t working.
Full disclosure before you jump into what I’m about to share I’m not a firm believer in any fixed rules for budgeting but I know that if you’re just getting started with budgeting or having challenges, a plan like #3 can help.
1. The Classic Spreadsheet Method: Alright, I've got a soft spot for spreadsheets. If you're like me and love to see the numbers, this one's for you. Create a simple plan using Excel or Google sheets (you can start by downloading my free budget tool to build your plan. Then take a little time regularly (at least every payday) and track every dollar that has come into out of your bank account AND any credit card transactions and compare it to your budget to see if you are on track. It's like a financial roadmap right at your fingertips. You can categorize your spending, set goals, and make adjustments as needed and the added bonus is that it is fully customizable based on what you want to know and see.
2. The Envelope System: Feeling a bit old-school? Give the envelope system a shot. Label envelopes for different spending categories like groceries, entertainment, or dining out. Stuff them with a certain amount of cash into each envelope based on your budget each payday, or at the beginning of the month. When the cash is gone from an envelope, that's it—no more spending in that category until the next month. It's a visual and tactile way to stay on top of your expenses.
You can even level this up and make it more modern by creating separate accounts for different saving and spending items in your plan. With the variety of different online no fee banks this is easier to do today more than ever!
3. The 50/30/20 Rule: This budgeting approach helps you plug your expenses into different categories to see where you fall. With this plan you allocate 50% of your income to needs (like rent and groceries), 30% to wants (dinners out, that latte habit), and 20% to savings and debt repayment. It's a flexible framework that can adapt to your lifestyle and financial goals.
4. Zero-Based Budgeting: For you detail-oriented folks, zero-based budgeting might be a game-changer. With this method, your income minus your expenses should equal zero. Every dollar has a purpose, whether it's for bills, savings, or even a treat-yo-self fund. It requires careful planning but ensures every dollar is working for you.
Level up this plan but making sure you move money out of your main account as soon as you are paid based on your zero-based budget.
5. The Smartphone App Approach: If you're glued to your phone (like most of us these days), why not put it to good use? There are tons of budgeting apps like Mint, YNAB (You Need A Budget), and many financial institutions also have helpful budget features. These apps can often sync with your accounts, track your spending, and provide insights into your financial habits. It's budgeting on the go, right at your fingertips.
For an app to truly help you, it’s important to partner the app with a solid budget AND keep an eye on your spending vs your plan regularly. Looking at where you stand to help you make spending decisions is a big piece of this approach working.
Remember, there's no one-size-fits-all approach to budgeting. It's all about finding what works best for you and your ADHD-friendly brain. Embrace your uniqueness, whether that means colour-coded spreadsheets, cash-stuffed envelopes, or app-driven financial wizardry.
So, go ahead and take that first step towards financial empowerment. Budgeting doesn't have to be a chore—it can be a tool that helps you live the life you want. And always remember, I've got your back on this journey if you need help or accountability let’s have a chat-book a free consultation today! 🌟
