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The Simplest Ways to Budget – Top Budgeting Tips

There are many different styles of budgeting, just as there are many different income levels. Your style of budget should be unique to you, as your financial situation may differ than most!  But while there are different types of budgets, there are two that stick out. Popular budget plans include the zero-sum budget and the 50/20/30 rule. It’s important to find a budgeting style that works best for you! 

The Zero-Sum Budget

This style of budgeting ensures that your money has a purpose and that you can manage it responsibly. This includes making sure all your bills are covered, including your savings and any other expenses you may have. Even if you want to go out for a night on the town, your zero-sum budget allows you to plan that! This type of budget plan allows you to designate every single dollar you earn monthly toward a specific expense!

Essentially, a zero-sum budget makes you use your money with purpose because each dollar is meant to be used a certain way. This budget plan is made this way to prevent any waste in your income. At the end of the month, you should have no unaccounted funds to worry about since your entire income is “spent” on something, such as bills or savings. Your monthly budget should account for “zero” waste at the end of the month. 

Some ways you can get started on your zero-sum budget include:

1. Write Down Your Monthly Income
2. Write Down Your Expected Expenses
3. Write Down Your Seasonal/ Unexpected Expenses
4. Subtract Your Income from Your Expenses and Make it Equal ZeroStart to Track Your Budget!

When creating your budget in this style, it is important that you are making sure to plan for the unexpected expenses. Unfortunately, one of the guarantees of life is that something will happen! Whether it is a car that breaks down or a leaky roof, it is better to be prepared than unprepared. 


50/20/30 Rule

This rule is meant to help you divide your savings into percentages. The largest percent, 50%, is for expenses that will not change throughout the month. These expenses are also known as your fixed expenses. Generally, this includes items like your mortgage, rent, insurance, or loans such as a title loan

About 20% of your income should be reserved for your savings and funds for any other financial goals you may have set. If you have begun to start working towards paying off your debt, this percentage is for that purpose. 

The last 30% of your income is for your variable expenses, which are expenses that will change throughout the month. These costs include your groceries, transportation costs, rainy day money, and other non-essential expenses. The purpose of the 50/20/30 budget is to help you manage your money and help you become more aware of where you are spending it. If you are overspending, or spending outside of your means, this budget can help you address those issues. In addition to diagnosing your financial issues, this type of budget will allow you to become more aware of your financial responsibility. 


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