Budgeting can suck.
I have tried budget and budget and end up just abandoning most of them. Usually, they are just too damn complicated.
This is why I moved onto the 80/20 Budget – what I believe is the simplest budget known to man (aside from no budget, of course).
How the 80/20 Budget Works
The 80/20 Budget is almost too simple. It only includes 2 categories. Here is how it works:
The 20 part of the budget is what put towards savings. You should automatically take this money out of your paycheck and other forms of income so you know that this money is hitting savings. 20% really isn’t that much but if you don’t make absolutely sure that you are putting this money aside, there is a good chance you might end up dipping into it when you’re not supposed to.
Note: 20% is only a guideline. You don’t have to only save 20%. Feel free to save as much as you want – this is just a general recommendation.
So what’s left for the remaining 80%?
That’s what makes the 80/20 Budget so great – you only have 2 categories that are both very simple.
The 80% includes rent, food, clothes, utilities, and everything else you can spend that hard earned money on.
If you aren’t too big on tracking where every dollar goes, you may find that this budget works for you. As long as you aren’t late on rent, miss your credit card payments, or anything like that, then you should be fine.
Just take out the amount you have designated as savings from your checking account and leave the rest. If you can keep it positive, then you are doing alright! If not, you may want to set up a few more categories (such as necessities and luxuries) to track your spending a bit better.
I really love the 80/20 Budget. It is the first budget that I have been able to stick to and don’t feel restricted by.
How about you? What kind of budget do you like to use?