There are many systems, tools, and resources out there that help you create and maintain a budget. Maybe you’ve tried a few with no success. Maybe you found one you like, but it just doesn’t motivate you much to budget. It’s time to find a system that works best for you and your family. Start the new year off by researching budget systems and deciding which one you like best. Here are a few ideas.
Dave Ramsey is a very popular guy. He knows his budgeting stuff because he’s been there, and done that. He’s experienced debt a few times, and he’s learned from his mistakes. From those experiences, he’s created a system that works for many people.
Dave uses a method called the “cash envelope system.” It’s pretty simplistic, really. Essentially, you divide your income into categories, determine a monthly amount that you can spend (budget), and place the cash money into a designated envelope. Then, you can only use the money within the envelope to do what you want or need to do. If the money runs out, you’re done with that category.
This method helps people who have a hard time knowing where they spent their money. Dave Ramsey actually has more to his program than just the envelope system. This is just a snippet of a bigger picture, but it’s a basic way to begin managing your money. He has resources and tools, and he offers classes on his website as well. You can check it all out here: http://www.daveramsey.com/.
Along the same lines as Dave Ramsey’s envelope system is an app called Mvelopes that does the same thing with using designated envelopes. There are some differences to this program compared to Dave’s.
First, everything is done online where as Dave’s method is all physically done. You create a budget, virtual envelopes, and keep track of it all online. The virtual envelopes is the same exact principle as the cash envelopes except everything stays within your account. You decide on the categories and the amount to designate. The app takes it from there and lets you know how you are doing with the budget.
50/30/20 Formula of Spending
This is a budgeting formula that helps you stay accountable to your spending goals. Essentially, your monthly income goes into one of three areas. 50% of your income goes to your needs. This is your living expenses like mortgage, utilities, food, etc. 30% of your income goes to your wants which include all the extra “stuff” like dining out, entertainment, vacations, and such. These are all the things you can live without, but you like to have. Lastly, 20% of your income goes to your savings and debt repayment. This includes your savings account, retirement fund, and any unpaid debt you owe.
These are just a few of the programs out there that help you get your money management under control. They are some of the most used and most successful systems. Find one from this list, or do a search on Pinterest to find one that works best for you this new year. Getting your finances in order can help you make big purchases like a home or car when the time comes.
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