{"id":6829,"date":"2023-03-10T06:24:07","date_gmt":"2023-03-10T06:24:07","guid":{"rendered":"https:\/\/prymprintables.com\/?p=6829"},"modified":"2023-03-10T06:24:11","modified_gmt":"2023-03-10T06:24:11","slug":"best-budgeting-methods-to-follow","status":"publish","type":"post","link":"https:\/\/prymprintables.com\/best-budgeting-methods-to-follow\/","title":{"rendered":"The 3 Best Budgeting Methods to Achieve your Money Goals in 2023"},"content":{"rendered":"\n
Do you know the number one dumb money mistake millennials make that makes them broke and poor?<\/p>\n\n\n\n
Answer: NOT creating a BUDGET… and following one of the three best budgeting methods today. <\/p>\n\n\n\n
It\u2019s not just millennials who commit this sin. Baby boomers and Gen X-ers are all the more guilty of not having one in the first place.<\/p>\n\n\n\n
And it\u2019s not about the money you make.<\/p>\n\n\n\n
It\u2019s about how much you keep\u2026 and how it works hard for you!<\/p>\n\n\n\n
But more on the latter in a future blog post. Let\u2019s focus our attention on the B-Word that everybody entering the adulting phase must get acquainted with.<\/p>\n\n\n\n
Many people fear the word budgeting. You may even have this belief that budgeting will tell you not<\/em><\/strong> to spend. That, of course, is a myth! Instead, budgeting gives you the power to spend your hard-earned money in the right way<\/em><\/strong>. It\u2019s a way of showing your money who\u2019s boss! <\/p>\n\n\n\n
I know a lot of people who are slaves to money. Heck, I was once a slave to the Almighty dollar. You know, I was working my fingers to the bones, barely making ends meet, and rewarding myself for all those sufferings by splurging, throwing caution to the wind, without being so sure if I will survive the next week. I thought at the time I was the boss. Turns out, I was the slave and a dumb one at that!<\/p>\n\n\n\n
I understand why people are afraid to budget. It\u2019s human nature \u2014 we fear what we do not know. So let me tell you everything about budgeting and the three stress-free ways of doing it!<\/p>\n\n\n\n
What is Budgeting?<\/strong><\/h2>\n\n\n\n
A straightforward definition of budgeting is that it\u2019s a PLAN. A plan for what you will do with your money. A strategy on how you will handle what\u2019s coming in and what\u2019s going out. When you give your money purpose, you will never be left scratching your head wondering where it went.<\/p>\n\n\n\n
Budgeting is not about restricting your spending. In fact, it gives you a blueprint of how much you should spend on different spending categories. Instead of money dictating your choices, you are taking the driver\u2019s seat and actively deciding where your money should go. <\/p>\n\n\n\n
Why You Should Budget<\/strong><\/h2>\n\n\n\n
Admit it. Most of the time, you\u2019re powerless. You feel powerless when an ad connects with you emotionally when you feel like you\u2019re missing out, and even when you see friends buying the newest, the latest, the grandest and you still haven\u2019t. I\u2019m even rendered powerless simply by watching someone eat something from Jollibee online. <\/p>\n\n\n\n
A budget is like that dear friend who approaches you and slaps you with the inconvenient truth. It sometimes forces you to confront yourself, telling you \u201cI don\u2019t think you can afford that for now, love.\u201d<\/p>\n\n\n\n
And then it comforts you by saying \u201cDon\u2019t worry. If you stick to your budget, you can do whatever the crap you want to do with your life later.\u201d<\/p>\n\n\n\n
My point is when you make a budget you can compare your income to your expenses. If you learn that you\u2019re spending more than you make, you can make the necessary adjustments to your spending right away and avoid consumer debt.<\/p>\n\n\n\n
Not sure why you\u2019re still broke when you\u2019re making too much?<\/p>\n\n\n\n
You might want to limit your Starbucks visit to twice a month and just brew your cuppa at home. Simply making some changes to your spending can make a whole lot of difference!<\/p>\n\n\n\n
If you\u2019re living paycheck to paycheck or getting debt up to your eyeballs, you should budget. Even if you are living comfortably with decent savings, you should still budget. Remember, money is a limited resource. You\u2019ll never know when you\u2019re actually, immediately going to need it!<\/p>\n\n\n\n
A budget helps you get ahead of your money, achieve your money goals, and knock debt out forever!<\/p>\n\n\n\n
Anyone can budget, even when you think you\u2019re not making enough (especially).<\/p>\n\n\n\n
The 3 Best Budgeting Methods to Use<\/strong><\/h2>\n\n\n\n
There are more than three budgeting methods out there, but I\u2019m going to share three of the most popular strategies that have worked for many people in managing their finances. Of course, the best budgeting technique is the one you\u2019ll stick to. That\u2019s going to be different for everyone, so you\u2019ll have to probably want to try them all out first to see which works best for your situation.<\/p>\n\n\n\n
The Zero-Sum Budget<\/strong><\/h2>\n\n\n\n<\/figure>\n\n\n\n
You can call it a zero-sum, or zero-based budget, and it simply means all your income minus all your expenses must be equal to zero. <\/p>\n\n\n\n
This doesn\u2019t literally mean that you are going to spend all of your money. The idea is that you are giving every dollar or peso you earn a purpose. <\/p>\n\n\n\n
Whether it\u2019s for paying your bills, debts, food, recreation, or savings, every amount that comes in must be assigned to a budget category. You are going to treat those categories as accounts that you need to pay for.<\/p>\n\n\n\n
So, if you make Php 25,000 a month, you\u2019re giving all your Php 25,000 a job. Add in all your income and then subtract all your expenses for the budgeting period. The result should end up at zero.<\/p>\n\n\n\n
E.g.<\/p>\n\n\n\n
Total Income:<\/strong> Php 25, 000<\/p>\n\n\n\n
Expenses:<\/strong><\/p>\n\n\n\n
Savings \u2013 Php 4,000<\/p>\n\n\n\n
Retirement Fund \u2013 2,000<\/p>\n\n\n\n
Bills \u2013 Php 6,000<\/p>\n\n\n\n
Food \u2013 Php 7,000<\/p>\n\n\n\n
Recreation \u2013 Php 3,000<\/p>\n\n\n\n
Miscellaneous \u2013 Php 3,000<\/p>\n\n\n\n
Total Expenses:<\/strong> Php 25, 000<\/p>\n\n\n\n
Income: Php 25, 000<\/em><\/p>\n\n\n\n
Expenses: \u2013 Php 25, 000<\/em><\/p>\n\n\n\n
Equal to: Php 0.00<\/em><\/p>\n\n\n\n
Here\u2019s an important reminder: Your bank account should never equal zero, only your budget should hit zero every month! This is because your budget every single amount you get.<\/p>\n\n\n\n
This type of budgeting works best for those living paycheck to paycheck. However, I personally do this kind of budgeting. It gives me an excellent view of where my money is going and helps me put the biggest focus on reaching my financial goals.<\/p>\n\n\n\n
With this method, if you were to save and spend exactly what was in each of your budget categories, you wouldn\u2019t be positive or negative. You would literally be at $0.<\/p>\n\n\n\n
You can go digital to make this method work, but I find manual budgeting on a budget notebook (or any notebook for that matter) easier to follow through. There are also printable budgeting worksheets that you can download to help you do your manual budgeting.<\/p>\n\n\n\n
You can even get a FREE one simply by subscribing to this blog!<\/p>\n\n\n\n
Envelope Budgeting or Cash-Only Budgeting<\/strong><\/h2>\n\n\n\n<\/figure>\n\n\n\n
This is an old-school way of budgeting, which I also love and practice along with the zero-sum budgeting method.<\/p>\n\n\n\n
Cash-only budgeting is where you use actual cash as your spending money. With this budgeting style, you immediately withdraw cash for your monthly\/ fortnightly budget. You allocate the withdrawn money into separate budget categories. You then place the cash in the envelopes labeled to match your categories. <\/p>\n\n\n\n
Once the cash in a particular envelope is gone, it\u2019s really gone. You stop spending on that category and avoid stealing from other envelopes.<\/p>\n\n\n\n
For example, if you budget Php 5,000 for your monthly groceries, you will only put that specific amount into your envelope labeled \u201cGroceries\u201d. As simple as that!<\/p>\n\n\n\n
If the total cost of the groceries is more than your budgeted amount, you may want to put some items back on the shelves where you got them from.<\/p>\n\n\n\n
This is the best budgeting method for those who struggle with overspending. This forces you to stop spending once you\u2019ve reached your limit or have exhausted all that\u2019s inside the envelope. It gives you the power to focus your money on the most important things. Cash envelopes even allowed me to save as much as 60% of my income! I\u2019ve detailed this in another blog post.<\/p>\n\n\n\n
![\"\"](\"https:\/\/i0.wp.com\/www.getfinancedlab.com\/wp-content\/uploads\/2020\/01\/Zero-Sum-Budget.png?ssl=1\")
<\/figure>\n\n\n\n![\"cash](\"https:\/\/i0.wp.com\/www.getfinancedlab.com\/wp-content\/uploads\/2020\/01\/IMG-5550-1024x1024.jpg?resize=1024%2C1024&ssl=1\")
<\/figure>\n\n\n\n