How To Budget For Busy People. 4 Different Methods

Creating a budget is easy if you have plenty of time on your hands, but creating a budget when you are busy is more challenging.

Budgeting is a skill that will help you track your expenses and make the most of your income. Without a budget, it is easy to overlook small expenses.

The truth is, successful people learn to budget early in their lives, and that is how they took control of their money.

Depending how much you have, I have put together four different ways to budget. No matter how much time you have, this article will help you decide which is the best budgeting method for you.

The Minimalist Budget ( For Very Busy People)

coins on a jar with the word budget on it

If you find yourself with little time on your hands, the minimalist budget is the right fit for you.

In the minimalist budget you write down the balances of your credit card accounts and the starting balance of your checking accounts at the beginning of every month. You can do this manually or you can use a spreadsheet.

The goal for this type of budgeting technique is to spend less than you make. This method works great when you have to save for an emergency fund.

Related: How To Save For An Emergency Fund Properly

I like this technique because it is straightforward and easy to follow. However, with more freedom comes more responsibility.

Since you only check once a month on your finances, you can easily overlook mistakes. It can be weeks before you finally correct these mistakes, or even longer.

Goal-Based Budgeting ( For Busy People)

graphic with budget word on it

This method is great for people who have more time availability. Out of all the different types of budgets, this has to be my favorite.

Essentially, you create a budget with one goal in mind.

Say for example, you need $10,000 for a down payment. Divide that amount by 12, which is the number of months you want to achieve the goal. With this calculation, you know you have to save $833 every month to afford the house down payment in the next 12 months.

Also Read: How We Paid Our Mortgage In Less Than Five Years. You Can Do It Too In 5 Easy Steps.

Take the money out of your account to pay yourself first. As soon as you get your check , set aside a small amount.

Paying yourself first will force you to cut costs in other unnecessary areas because you’ll have to work with the remaining amount.

Although I chose a house down payment as an example, this budgeting method works best for smaller items such as a car down payment.

The 50/30/20 Budget ( For Medium Busy People)

hands on a calculator with a notepad on opposite hand

Popularized by Senator Warren, the 50/30/20 budget is the budget for people with a moderate amount of time.

You will need to spend at least an hour or two each month to make sure you have enough money in your bank account to pay all your bills and still have some leftover for savings.

Read: Stretch your dollars using five simple budgeting basic

To make this budget work, you need to divide your income into three categories:

  • 50% going towards necessities,
  • 30% going towards wants,
  • 20% for savings.

First, calculate how much money you earn per month by looking at your paycheck stubs and dividing it by 12 months (1st through 12th).

Second, you will assign a 50/30/20 percentage split to each category. Get your calculator on hand and start calculating the numbers that apply to you.

This method takes more time since you have to keep track of most expenses.

We recommend using an app such as personal capital. It can help you keep track of costs and even categorize costs automatically.

Related: Best free budgeting apps for beginners

Envelope System Method ( For People With Plenty Of Time)

This method is for those who can take their time to categorize their expenses in physical envelopes.

First, you have to create categories for your family’s main expenses. If you’ve never done this, start with this list from mint.

As a suggestion, it’s good to keep the number of categories low to simplify the process.

Second, place cash on each envelope. This is a monthly amount that will be used for that particular category.

This method is great because it keeps you accountable to the cash in the envelopes. Once there is no more cash, you’re out.

In contrast, you really don’t know how much you have left on the account when you pay with credit cards.

This budgeting method can help you increase your savings and help you stay ahead of your finances.

Considering that most Americans have less than 3 months of savings, you will be far ahead than most.

In summary, these budgeting methods can be tailored to your available time.

Saving money does not have to be complicated, and remember it is always great to try different methods depending on how busy you are.

Also, financial discipline takes time. So give yourself a break and keep reading our blog where we share the best tips on money subjects.

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