February 12th, 2021
Budgeting is one of the key concepts to improving personal and family wealth. Creating a plan to increase savings, emergency funds and prep for long-term needs is essential to everyone, but few families are doing this consistently. Budgeting is a habit.
Find the right type of budget that works for your family. Here are some of the most popular budgeting options for families to increase wealth long-term.
The envelope budget focuses on assigning money to specific categories and not spending any more than what is in each “envelope”. This was a popular way of saving prior to online banking and payments. Although effective, this may not be the best option for those who have issues controlling excess spending once the allotted money is gone. If the family is able to manage this correctly, using apps like Mint, Every Dollar and You Need A Budget are great ways to set up virtual “envelope budgets” for fund management.
This method focuses on goals set by the family. The 50/30/20 percent budgets are based on a family’s after-tax income.
Zero Dollar Budgeting
This method has families planning how to spend every dollar earned each month down to the penny. If a family has trouble controlling spending, this is a great way to wean overspending from the family and allows all to see the pain areas. This type of budget takes increased attention from the main controller.
This separates the entire budget into 5 specific categories:
Tips to Improve Budgeting
No matter how good a person is with their finances, having checks and balances in place that will assist in growth is never a bad thing. Here are some great tips to improve any budgeting tactics.
Take these great tips and conquer the wealth deficit with ease!