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The 6 Styles of Budgeting Explained | How to Make A Budget
So you’ve decided to take control of your finances, get your budget in order and live the life that you deserve, but you run into a problem. There are so many different budgets to choose from that it’s almost impossible to figure out which one is right for you. Today, that’s what we’re going to try and figure out. We’re going to be going over the 6 most common styles of budgeting, discussing the pros and cons associated with each style, and hopefully making it easier for you to make a decision on which to start with and use.
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#Budgeting #Frugal #SavingMoney
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Would like a video on taxes once you retire FIRE to pay least taxes. And best way for a parent can leave money to kids following death. Thx great vid as always!
Another tax question, married filing separate vs. Married filing jointly when you have rentals
Sir next topic index fund and etf.thanks
Is it normal in USA to have creditcard debt with interest of 15%?
Useful to have it broken down.
Lawn ornaments? That amused me.
no audio?
Zero based is the best for me!
I track where my money is going to determine if I’m spending money on things that don’t matter, making impulse purchases, or wasting money without even realising it… last year I wasted $5,980 on McDonald's,entertainment,shopping, and Uber. I Don’t use card because you don’t see the money being taken out of your account whereas using cash it makes me spend less money because you think of all the hours spend making that money… I put the name of all my expenses on an envelope and put the money in cash into it and that's what I use to pay for everything For e.g. going out $40 monthly once the $40 is gone for the month I'm done going out. I also started putting money aside for a Rainy Day Fund (emergency fund), if something unexpectedly comes up this is where I can turn too so I won’t be in a position where I don’t have the money ($50-100). I use $150 monthly to pay for things ( use a app called Pocketbook to help me with my spending). I’m focusing on a goal, yearly goal, then break it into monthly goal, then daily goals for example investing in high income skills, skills which generate high income but I didn't know where to start. I want to have multiple streams of income by 23-25. Right now I'm learning about Asset and Liability and has gotten addicted to saving the right way.
“those who don't manage their money will always work for those who do. Do not save what is left after spending, but spend what is left after saving”
I just have 6 months emergency fund and all bills on auto-pay and from every pay check 15% is put into a global index fund, whatever is left after a comfortable lifestyle is just saved and goes towards saving to big ticket purchases like camper-van and such.
Hello. I am subscribed to your channel. Very nice as always. I share your passion for financial freedom. I just wanted you to make a video on how you make your videos including the editing tools you use. Thanks
Thanks for sharing this info. What i use is the cash only budget to avoid credit card debt.
This great summary is underrated
I just wanted to say thank you for sharing your knowledge.
This made me realize is my budget is combo of percentage, automated, comprehensive styles…Maybe it's a sign to simplify and commit lol
I basically have 2 methods of budgeting:
1. Somewhat like Revese (I think): I didn't know what my hours would be at my substitute job, so I started budgeting by the penny, thinking "how much/little do I actually need to live", looking at prices of things that I bought/needed on regular basic, and calculating it to yearly and weekly ((month*12)+(week*52))/52 (pay checks are weekly, not monthly).
Second/current budget: I still budget by the penny tracking every need during a year. It's under 40% of my net pay since I work 60 hours/week regularly. So I make sure to save at least 40% (same amount I spend). The last 20% is discretionary but optional. Now if my hours drop, I'll still spend the same low amount, and save as much as I can, but still budget by the penny.
I’ve got a value based debt payoff budget lol.
On the 50/30/20 budget, debt minimum payments are apart of the 50% necessities. Even Elizabeth Warren has said that in interviews
Awesome video! I think budgeting is so important so that we can save and invest more in the future. Thanks for the great advice!
Looking at your Budgeting video list, I think I see a separate video on each of these except for comprehensive budgeting. Am I missing something, or can you make a video that goes more into detail on comprehensive budgeting? A comprehensive video on comprehensive budgeting?
I’d actually make 30% my savings and 20% my wants.
The thing is with Americans…
They love their Starbucks.
Hey Dan, you sound so much like another Dan I listen to. Check out the podcast hardcore history with Dan Carlin! Amazing! It’s a compliment by the way 😉
My budgeting style is probably most similar to the automatic style but I project far into the future so I'm always keeping my long-term goals in mind. I put as much on auto-pay as possible including my investments. I set a budget at the beginning of the month but then update my forecast for what I'm actually going to spend that month pretty much daily. I have an amount that I like to keep in my checking account ($10-15K) and an amount that I should be able to invest consistently every week comfortably, but I allow both to flex as various expenses arise.
I use a combo of the envelope and automatic budget
10% charity?
Reverse budget all the way. Tracking your networth every month becomes addictive and keeps you motivated unlike other budgets.
3k on lawn ornaments 😳
A zero-budget is absolutely frightening to me. Anything that changes forces a rewrite of the entire budget. There is no slop to take up the slack. Any life surprises, if they weren't budgeted for in the first place, are cataclysmic. Nobody can think of every eventuality, and if you get paid by the week, it's very difficult to budget for a whole month or longer at a time.
Thus far, the automatic budget style, combined with a built-in fudge-factor, provides the most comfort and sustainability. My credit card bills, for example, are paid every week (I get paid weekly). I divide the minimum monthly payment by 3, and pay that much (or more) each week via my bank's billpay service. This assures that I am not late, and that I pay more than the minimum each month. For any bills that I still pay monthly, I do a weekly transfer from my primary checking account to a "monthly bills only" secondary account. This is where some of the fudge-factor builds up, since every three months, we have an extra week paid in. If something suddenly changes, I can rearrange things at my leisure, usually incorporating some of the fudge factor in my primary account, or some of the fudge factor in my secondary account, or both. As the credit cards get paid down, the minimums go down, too. I usually keep paying the higher amount in order to pay down faster, until something forces me to readjust significantly enough that I need to reduce what I'm paying to the cards. I don't like to do this, but this adjustment is usually inevitable, if infrequent.
I budget 90% towards my needs and ten percent towards my goals, since I am in the last stages of paying off debt. Once the debt is dealt with, I intend to put 40% toward my needs(since I will have much lower expenses) and 60% toward my goals. I find it's simpler to not allow "wants" to enter the equation, since that would make me unhappy and frustrated. Besides, when you're low-income, you have to get used to not having what you want.
My budget style is getting a second job
I have not found one budget that works for me. I take ideas and put them together to my own way of budgeting. Tracking my spending for years has helped allot. It takes time to change habits and thats ok 😊
"Give every dollar a job on paper" Why couldn't anyone have told me that when I was 18.
Mine is 15%needs, 15%Wants, 70% saving but that's cuz I live with my parents. When I lived alone, it used to be 55%needs, 15%Wants, 30%saving
I do a little bit of everything. Some of my paycheck goes into a separate high-interest bank account, I pay off my credit card within 1-2 days so I'm always keenly aware of what I spend, and I just try to spend as little as possible without being a tightwad.
It makes me so upset that the beginning of the video said that schools won't teach this and I am a business teacher and I DO TEACH personal finance, money management, and budgeting. Although, I did not learn these things in high school.
Great compilation and visually engaging. Thanks!
I like the envelope method better than the other methods in this video.
I enjoy doing automatic and comprehensive budgeting. It's not easy to keep up with no budgeting experience , but for intermediate and advanced budgeting it's a great way to do it.