The 80/20 rule as a strategy for budgeting is a great method that cuts the hassle of doing tedious calculations or close tracking for you to manage your finances. Using this method, a person’s earnings can be divided into two categories simply and clearly: 80% of it is used for spending and the remaining 20% …

The practice of paying yourself first takes a very different approach to managing personal finances. It focuses on your savings and investments as necessary expenses rather than something done at the end. Considering paying yourself first means that before spending any other money that is for non-essential reasons, you put aside a portion of your …

Incremental budgeting is a method that employs making small changes to a last year’s budget format to come up with a new budget. It is the easiest way to budget and therefore the most common one, particularly since it requires less time and resources compared to other budgeting. In other words, or to put it, …

This is the technique in which more cash is employed in the transactions instead of credit and debit cards. In my opinion, cash-based budgeting, as this technique is known, will become very popular in the future. Many people attempt to be in control of their finances and aim for better financial behavior. This consists of …

Reverse budgeting is unlike the traditional budgeting techniques in that it combines savings and expense management in that order. Instead of assigning limits for various expenditures and trying to stay within them, reverse budgeting starts by determining how much you need to earn, and then the rest of your income goes to expenses. The objective …

Budgeting on a percentage basis may be killing two birds with one stone because it is simple to implement an effective form of budgeting. Rather than allocating certain dollar figures for every one of the expense categories, this approach focuses on the saving target, other expense goals, and allocating expenditures as only a percentage of …

Line-item budgeting refers to a controlled expenditure method of allocation to natural resources in real-time. This form of budgeting is popular among individuals, businesses, and even government. This technique comprises of income and expenditure vertical disaggregation or classification into specific categories known as ‘line items’ for easier control and analysis. This method clearly shows all …

One of the oldest systems of control used by people to track their spending is envelope budgeting. Envelope budgeting starts with dividing your income into portions, or envelopes, based on each, including a specific spending limit for some activity. To prevent going beyond the limit set for a particular envelope, you need to stick with …

In simple terms, zero-based budgeting assigns every dollar a use. We do not expect planning for emergencies with some leftover money; each and every cent is planned out. Those who are into strict money management do relish zero-based budgeting like a piece of fine art, and for good reasons as it outlines the limits of …

Value-based budgeting suggests that rather than attempting to achieve a predetermined savings target, you should instead seek to align your expenditures with your value structures. This makes it possible to make sure that any expenditure made is worth increasing your value and is part of your overall strategy. The approach enables you to not only …