Smart Ways to Create a Personalized Financial Budget
Scrimping and budgeting isn’t something that most people can do over the long term. Some find it no fun and time taking, but what they don’t realize is that a spending plan is the fastest way to stay away from the unwise spending and mountain of debt. Income makes the most significant wealth-building tool, and the great way to harness the clout of your income is the monthly budget. So, here are some proven ways to create a smart budget plan to get your finances back on track.
The Three Step Budget
This budget plan created by Andrew Tobias is pretty simple and straightforward. The first step is to destroy all your credit cards and invest only 20% of your earnings. The remaining 80% can be used for living. You just need to keep in mind one thumb rule that is not to overspend your 80% of the income. This budget plan makes a great choice for those who have an idea of what to spend.
Broad Percentage Allocations
If you don’t want to deal with more detail on where you are spending your money, this is the method you need to follow. The basic idea is to allocate a large percentage to your needs like housing and a percentage to your savings and needs. Without overwhelming you with details, this method will offer you guidelines for your spending.
What if you manage to save money while spending the entire budget every month? Before kicking out the concept as madly counterproductive, hear us out. What you need to do is take off your expenses from your income to get down to zero dollars left at the end of the month. The beauty of this budget is that it eliminates frivolous spending and you know where every single dollar of your income is going. Love the idea? Take the Zero Sum Budgeting quiz to get more details about the plan. Follow Health IQ who provides several additional budgeting quizzes to help you learn more.
The sooner you make one of these smart budget plans part of your money-handling strategy, the sooner you’ll notice your debt go down, and your savings go up.