8 Techniques of Budgeting

 

“The most difficult thing is the decision to act, the rest is merely tenacity.”

~Amelia Earhart~

Hey lovelies so last time I had shared with you how to create a Spending Plan or a Budget.

Today I am sharing with you guys 8 Techniques of Budgeting.

You can select any of those according to what suits your financial goals.

Below are the 8 Budgeting Techniques -

1. The Balanced Money Formula or the 50-30-20 Method.

According to this technique, you spend 50% of your total income on your needs, 20% on your savings and 30% on your wants.

2. Cash Only Budgeting or Envelope Budgeting.

This kind of spending involves spending only via cash, that is actual money. No plastic money (credit cards) to be used.

3. Zero Based Budget.

In this type of budgeting, every rupee/dollar is assigned a job.

It's basically Income subtract Expenses. There is no space for idle money.

This is the ultimate budget for those who want to be completely in control of their money.

4. The 60 % Solution.

In this knd of budgeting, 60% of your income is used for your committed expenses.

The remaining 40% of your income is divided into four categories with 10% allocated to each category. They are Retirement, Long Term Savings, Short Term Savings and Fun Money.

5. No Budget Budget.

This kind of budgeting is an easy way to limit your spending by automating most of your expenses and savings target.

In No Budget Budget, you determine your savings and investments bucket and automate payments towards those.

The remaining money is left for your expenses.

6. Reverse Budgeting or Pay Yourself Budget.

In this you simply pay yourself first by assigning your money on savings & investment first & then spend your money towards expenses. This is for those who want to make Investing & Savings a priority.

7. Value Based Budgeting.

In this you spend your money mindfully on things that boost your happiness and add value to your lifestyle.

It's about spending money on those things you care most about in your life.

8. 80/20 Budget Rule.

It's pretty simple, 20% of your net income goes towards your savings & remaining 80% of your income goes towards your expenses.

By creating your own budget and by picking the best method for you, you also won't be spending too much or too little on managing your budget.

Hope you lovelies found this helpful

On a side note, can you spot the Dutch Truffle Pastry in this pic ;)