Finances have a knack for becoming complicated. For those without formal training, a finance degree, or an accounting degree it can feel next to impossible sometimes! Therefore, one major life-changing strategy is making your budget as simple as possible will allow you to get a better handle on your finances so that you can focus on more important matters. Simplifying your budget can positively affect all aspects of your finances by helping you keep everything under control.
Using these 10 strategies to simplify your budget can help do just that.
Stressing out over your finances is a waste of your time, so rein them in today with a simpler, easier-to-manage budget! These tips are easy to use. You can start today. The best part is once you put this together you have minimal work in the future to maintain it.
Follow these 10 Strategies to Simplify Your Budget easy, workable, and effective:
Start with a simple spreadsheet.
Keeping things in a spreadsheet can simplify your budget significantly. The reason for that is it tally amounts. Plus, it helps you see what your total take-home income is, and what you are spending on each expense category. It is highly customizable. Every person has very different circumstances and financial goals. So having flexibility in how you set up your and your family’s budget is the key to success!
Using a spreadsheet program, set it up however you like, or just buy the complete ready out of the box budgeting bundle for Google Docs. It is a done-for-you budgeting system that takes the guesswork out of getting started.
Just choose something that works for you. The point is to just start.
One way to break out your budget is 60% / 40%
What is the 60 40 Budget Plan
Devote 60% to your expenses and 40% to retirement, debt repayment, savings, and entertainment.
The 60% Solution is a budget strategy that entails fitting your expenses into 60% of your gross income so that you can dedicate the remaining 40% to retirement, debt repayment, short-term and long-term savings, and fun or entertainment expenses.
Devote 10% to your retirement.
Put 10% of your gross income toward your retirement, such as in a 401(k) investment plan. Refrain from touching this money for any purpose unless the circumstances are dire.
Devote 10% to debt repayment and longer-term savings.
Invest in an index fund or stocks if these are your investment vehicles of choice. Otherwise, put the money away in a savings account and touch it only to repay debt or in financial emergencies.
Devote 10% to your short-term savings.
This money is for periodic expenses like medical expenses, auto maintenance and repairs, appliances, birthday gifts, Christmas gifts, and home maintenance costs. Spend this money when you need it because that is precisely what you’re saving it for.
Devote 10% to your “fun money.”
You can spend this money in any manner that pleases you. This is guilt-free money that you can spend on movies, entertainment, eating out, comic books, junk food, or anything else that you wish.
Reduce the number of categories you use.
Many budget software programs instruct you to use a million different categories or subcategories. If you want to simplify your budget, use as few as you can. Rather than having a category for every entry, combine some expenses into a larger category to keep it simple.
Pay your bills online.
Automate your bill payments as much as possible so that you don’t have to remember to pay your bills every month or buy stamps. Consider automatic bank withdrawals and pay bills online through automatic debit whenever you can.
Automate your savings.
Every time your paycheck is deposited into your account, have a transaction scheduled that will transfer a specific amount into your savings from your checking. Aim to find high-yield savings account for this purpose.
Keep your fun money in cash form.
Take out your 10%, keep it in cash, and use it as you see fit. Watching the cash disappear from your wallet can teach you a lot about where the money goes.
If you investigate, you’ll find numerous techniques to simplify your budget. Do what works well for you and your family. Avoid struggling with a new budget plan because you think it must be better. If it isn’t helping you budget, then it’s not the “better” option for your needs. Sometimes simpler is more effective.
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