Let’s face it. Budgeting can be overwhelming and dreaded by many people. Whether you’re a beginner or an anti-budgeter, there are budget strategies out there that can work for you. Budgeting is essential if you want to effectively manage your money and meet financial goals. However, coming up with a budget or spending plan doesn’t have to be a tedious, stressful, or time-consuming process.
There are plenty of budget strategies to consider using even if you don’t feel like planning each dollar you earn or carefully tracking your expenses. In this blog post, I’ll discuss the top three budget strategies for beginners or anti-budgeters that can help you manage your money with ease and stay on track financially.
Pay Yourself First
The pay yourself first strategy involves setting aside a certain percentage or dollar amount of your paycheck for savings before you even pay your bills or spend money on discretionary expenses. This strategy forces you to prioritize your savings goals and ensures that they are being met before anything else.
Start by determining what percentage or dollar amount you can realistically save each pay period and set up an automatic transfer from your checking account to your savings account. This strategy also has the added benefit of helping you avoid the temptation of overspending, as you’ll have less money readily available to spend.
I love the pay yourself first because traditional budget strategies tell us to plan for every expense and then save what’s left or use an remaining funds to go toward future goals. By paying yourself first, you can prioritize paying off debt, saving for the future, or any other financial goal. Then, you just budget with the money that left for all your other expenses.
With this method, you don’t have to worry about counting every penny or falling behind on certain goals since you’ll take care of that immediately as soon as you get paid. If you want to treat yourself to something nice, you can do so without guilt knowing that you’ve already put money toward debt or your investment goal for the month.
The percentage based budgeting strategy involves allocating a certain percentage of your income towards different categories such as housing, transportation, food, entertainment, and savings. The percentages can vary depending on your income, location, and personal preferences.
For example, you may allocate:
- 30% of your income towards housing
- 15% towards transportation
- 10% towards food
- 10% towards entertainment
- 15% towards savings
Another common budgeting method is the 50/30/20 rule where 50% of your income goes toward needs, 30% goes toward wants and flexible expenses, and 20% goes toward saving and debt payoff.
This strategy gives you more flexibility than a traditional budget, as you can adjust your spending in each category based on your priorities while still ensuring that you are saving a certain percentage of your income. This method is also better for anyone who earns a fluctuating income. Let’s say you’re a freelancer and make $3,500 one month and $5,000 the next month. This is a very realistic scenario when you’re self-employed or own a small business.
Instead of sticking to a fixed amount for some of your flexible expenses, you can budget based on a percentage of whatever your income is that month.
Cash Budget Strategies
The final budget strategy to consider for a no hassle experience is a cash budget. This involves using cash for all of your expenses instead of relying on credit cards or other forms of payment. It can be helpful for those who struggle with overspending or want to have more control over their spending.
Of course, you can’t use cash for every expense during the month so you can create a budget for each category for costs like rent or your mortgage, utility bills, debt payments and so on. Then, withdraw the appropriate amount of cash for those expenses. Once the cash is gone, you’re done spending until the next payday.
Cash budget strategies work great for certain expense categories including all of your discretionary spending, such as shopping, entertainment, and dining out. Once the cash or prepaid card is gone, you’re done spending for the month so it takes the stress away from managing funds or feeling guilty for spending more than you planned. Also, if you don’t want to closely track what you spend your cash on your don’t have to.
I know more businesses are going cashless these days but a cash budget can still work for some people even if you only do it on a smaller scale. My husband and I each like to withdraw cash each month for a personal allowance. That way, we can spend the fixed amount on whatever we want like hobbies, coffee shops, etc. Even if you only choose to use cash for a personal allowance, dining out, and entertainment, it can be a huge benefit if you consider yourself an anti-budgeter.
Summary: 3 Budget Strategies That Really Work
Budgeting doesn’t have to be a daunting task. By implementing one of these three budget strategies, you can take control of your finances without sacrificing all of your free time tracking every penny. Whether you choose to follow the pay yourself first strategy, the percentage based strategy, or the cash budget strategy, the important thing is to find a strategy that works for you and stick to it. With a little discipline and effort, you can achieve your financial goals and live the life you want.