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The Best Budget for You

The Best Budget for You5/25/2018

Making and sticking to a budget is one of the most important steps to taking control of your finances and achieving your goals, but many Americans can’t stick with it. Help yourself succeed by choosing a budget that fits your lifestyle!

Zero-Sum Budgeting

First, take all your available income and decide in advance where you want to spend it. Your categories can be as broad or granular as you’d like. Once you have your categories figured out you’ll set a budget for each category. At the end, your income minus planned expenses should equal zero. If you have income that’s unaccounted for you can increase the budget of a category, like adding it to savings.

Cash Only Budget

First, figure out what transactions you will pay for online, like automated bills or credit card payments. Then, plan on paying for everything else with cash. You’ll withdraw cash and sub-divide it into main spending categories, like dining out, gas, groceries or other regular expenses. Write each category on an envelope and keep your cash there. You’ll be able to see how much you have left after each purchase!

Reverse Budgeting

With this budget there are three categories: fixed expenses, savings goals, and everything else. First calculate how much you will need for fixed expenses, like rent and utilities, and future savings goals. Then you can either automate paying all fixed expenses and future savings goals, or put the money required for those expenses in a separate checking account. Then you’re free to spend the rest as you like!

Survival Budget

This is great for people who are struggling to make ends meet or have never had a budget. First, figure out where your money is going. You can use a banking or budget app or create a spreadsheet. Then you’ll split your expenses into two categories: Must Haves and Everything Else. Then you’ll try and cut areas of everything else to save money, find ways to cut down on existing bills, or get rid of Must Haves that aren’t really must-haves, like cable TV.

Incremental Improvement Budgeting

If you have good habits overall but want to improve here and there, this is a good budget for you. First, figure out how you spend your money, then assess which categories you spend the most on. Once you have that area identified, you’ll take these three action steps: figure out a way to control spending for that category, establish a way to measure spending, and decide where you want the money you’re saving to go. Putting a named goal to the savings will make you more likely to control and measure spending in that category.

Once you have the best budget for your lifestyle chosen, it will be easier to stick to a budget and achieve your goals! No matter what your goals are, PCU can help you get there. We have several savings or investment account options! Talk to one of our financial advisors to find the tools to best fit you and your family’s needs!

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