1. The 20/80 method
Using this plan implies you’re able to do the following actions:
- Pay off all of your debt and bank loans.
- Invest during a business or save around 200th of your monthly wage. this can be the cash that you just can’t pay.
- Spend the other 80th of your wage in whatever way you want.You should also keep in mind that you should save 1st, then spend the rest. If 200th is just too huge of a number, try and start with 100% or at least 5-hitter. this can help you develop a habit and create an initial saving’s fund.
2. The 60/10/10/10/10 method
This method works this way:
- 60% for your main expenses,
- 10% for your retirement,
- 10% for long-term purchases,
- 10% for rare expenses,
- 10% for entertainment.
Your main expenses are food, utilities, transportation, and clothing. A car, a house renovation, or paying off debt all belong to long-term purchases. Rare expenses would be things like repairing your car, visiting a doctor, or expensive gifts.
If you’ve got a large debt, it’s better to just re-purpose the ten that you saved for retirement till you pay it off.
3. The 10% method
This method means you have to save 10% of your money from your total income. Such a small amount won’t affect your budget or the quality of your life.
It’s even better to put this money in a bank so you don’t have the urge to spend it right away. If you can easily save 10%, try 15% or even 20%.
4. The “halves” method
This method suggests that you divide all your money into 2 parts: the first part goes toward everyday needs, the second part goes to the bank. When your cash on hand is gone, go to the bank and take half of the sum you have in there. Repeat as needed.
It works best for those who can’t control their everyday expenses.
5. The “4 envelopes” method
- First of all, you have to count the total sum of your upcoming income.
- Then you “take” money for big purchases or you save 10-20%.
- Then you “take” money for regular expenses (rent, school, parking, and so on).The remaining sum should then be divided into 4 parts. So we get 4 envelopes, one for each week. This money may be spent on anything you want (food, entertainment, transportation). Just don’t forget about the budget you have.
6. The granny method
This idea is really simple:
- For each important expense category you have a special envelope. You write its name and the total that you need. These categories depend on the person and their lifestyle, and can include things like: food, clothing, medicine, car, entertainment, and so on.
- All income is divided into parts, depending on the number of categories, and put into envelopes. When you need money, you take it from the relevant envelope. If you run out of money from the “entertainment” envelope, it’s better to avoid entertainment that you have to pay for until your source of income replenishes itself. If you run out of money from an important envelope, like the “food” envelope, you take money from a less significant envelope and adjust the future sum you put into this envelope.
- The remaining money may be spent or saved. It depends on your goals and the amount of money left.
Which of the methods suits you the best?