12/30/2023 0 Comments Personal budget methodsThe envelope budget is a tried-and-true cash-based budgeting system that has helped many people smash debt and curb bad spending habits. 3: Envelope Budget This Savings Budget for Google Sheets is based on the envelope method. Regardless of the budgeting method you use, it can be helpful to figure out how your spending and saving percentages measure up to the 50/30/20 budget rule. This method is ideal for those concerned with big-picture financial information because it considerably limits the number of budget categories you have to contend with. However, keep in mind that the combined percentage for essentials and personal expenses should not exceed 80%. If you use this method, you may find that a slightly different ratio works best for your financial situation. The idea is that if you allocate 50% of your post-tax income to needs (housing, bills, food), 30% to wants (eating out, travel, personal care items), and 20% to freedom (debt payoff and savings), you will automatically limit major expenses while still saving enough to be financially secure. The 50/30/20 budget is based on personal finance “rules of thumb.” 2: 50/30/20 Budget How to Use a 50/30/20 Budget, With Free Templates It’s also a great tool for folks just learning to budget as it provides the most detailed financial data of any of the other methods on this list. This method is ideal for anyone who prefers a hands-on approach to budgeting. This method forces you to spend time each month creating a detailed plan for your spending and savings in the coming month, which naturally prepares your budget for increases in spending that occur around events such as holidays, wedding season, and back to school. If you don’t use all the dollars assigned to a specific category, then the funds can be rolled over to a different category.
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