Budgeting Made Easy

Budgeting doesn’t have to be a chore. Many people spend early Saturday mornings going over their check registers, ATM and debit card receipts and tracking where their money has been spent over the past seven days. It can lead to bad moods and bad days. However, there’s a new version of budgeting that you may find easier and more pleasing to follow. Simple is the keyword.

Similar to the plate version of dieting, this modern form of budgeting involves just a few large, main categories to track. Again, keeping it simple is the key. The overall plan is to divide your monthly take-home pay into two sections: 60%, and the remaining 40%.

60% SECTION
Contain all absolutely necessary spending to this section, which is roughly 60% of your net income. Necessary spending includes items such as your rent or mortgage, utilities, food, credit cards, gasoline, etc.  If your child takes swimming lessons, add that to your necessary spending list.

40% SECTION
The remaining 40% is divided into four equal categories of 10% each.  The categories are fun money, savings, odds-n-ends and retirement.

• Fun money is to cover events or activities you do just for fun such as dinners, movies, theme parks, etc.

• An often overlooked category is savings. Making sure to invest at least 10% of your take-home pay into savings guarantees you emergency money when you need it.
  
  
• The odds-n-ends category covers any type of irregular or unplanned expense. This would include those surprise expenses such as your daughter needs a special type of tap shoe, or there’s an upcoming seminar you wish to attend, etc.

• The retirement category covers what you are putting aside for your golden years in IRAs, CDs, mutual funds, a 401(k) etc

As you go along, any of the four category percents can be adjusted as needs change or if you cut back in another category As with any other budget form, if you overspend or adjust one category, you must adjust a different category during that month to balance things out. However, the beauty of this budget is that the number of categories to track is finite and minimal.

If you’re someone who needs to know where every single penny is going, this plan is not for you.  But, if you’re extremely busy or dislike tracking minute details, this plan will work well for you. The plan is much easier and simpler to follow.  You’re able to not only watch your budget, but also enjoy your life.