If you google “budgeting,” chances are that you’re going to be completely overwhelmed. You’re going to hear about “The 7 ways to budget”, “5 types of budgeting”, and “9 types of personal budgets.”
Then you have the banks who have to give you their 2 cents (pun marginally intended)... so you have budgeting according to CBA, NAB and the others.
And then you have the self-help types who have apparently achieved nirvana at the age of 20 and want to share their knowledge with you (all for a very low price of $250/month). And last but not least, you have the finfluencers giving you their top tips, strategies formats and spreadsheets.
So weve done the heavy lifting for you. After spending hours going through Google results and more hours going down the IG and TikTok rabbit holes, we’re happy to present you with the top three budgeting strategies that every beginner can apply.
So read through each one and see which one works best for you.
Btw, the Nine25 App uses the 50-30-20 budget for Bill Streams.
The 50/30/20 budget method
50% of your income goes towards the things that can’t not be paid, like your rent, bills, insurance, medical expenses, groceries and all the things humans need to keep on keeping on.
30% to what you want for yourself… nights out, bevvies, food dates, movies, concerts. I guess this is the fun fund. The fun you want to have today and not in 10 years.
20% is the 10-year fun fund. 20% of your earnings go towards your bigger wants, travel dreams, long-term goals, savings, investing, emergency fund, buying a house, never working again fund.
These percentages can be changed to suit your income level. So if your rent is quite high because you prefer to live close to work rather than travel or something like that so you might then have to allocate 60% of your income to your needs.
Or if you are someone who prefers to prioritise your long-term goals over your short-term goals your budget may be something like 50/20/30.This method isn’t super strict or restrictive. It is adaptable. That’s the main reason we like it.
Goal-based budget method
Think one seemed like something that we would use as a short-term budgeting option for when you have a specific money goal in mind. The key to this one is to have a reachable goal.
The goal-based budget works best if you’re someone that already works towards different goals on a daily basis. And by goals, we don't just mean money goals. You could be someone that has the goal to read one new book every month, or learn how to speak another language. Just remember: The key to success here is to be honest with yourself and set goals that are realistic for you.
The goal-based budget becomes useful because it allows you to decide what’s important and prioritise your goals.
Debt Avalanche budget method
Nice and simple: If you have any debt/loans/borrowings, pay off the loan with the highest interest rate first and then move on to the next highest and the next highest. With this method, you’e not just gradually reducing the loans that you have to pay back, but you’re also reducing the amount of money you're losing to interest repayments.