Need Help With A Budget? 4 Budgeting Plans Explained
We’re explaining the pay-yourself-first plan, envelope plan, zero-based budgeting, and the balanced money formula to teach you the best budgeting plans to get your finances back on track. Read through the plans and then decide for yourself which plan will work best for you!
4 Budgeting Plans Explained
1. The Pay-Yourself-First Plan
The pay-yourself-first plan is one of the easiest budgeting plans. When you receive your paycheck, you immediately take a percentage of that money and set it aside for your savings first, and then you spend what is leftover on needs and wants.
It’s recommended to take 20% of your paycheck and put it in either a savings account, 401(k), IRA, or investment account. If that goal is too daunting, start with 5% and work your way up.
This plan is low-maintenance; once you set aside the savings, you can spend the rest freely. This can be a pro in terms of not having to consider every purchase but can be a con if it leads to undisciplined spending.
Other benefits of this plan include prioritizing savings first and automating your budget. A major downfall is that this plan is not ideal if you currently live paycheck to paycheck and if prioritizing savings would lead you to overdraft or not pay bills on time.
2. The Envelope Plan
The envelope plan is one of the most hands-on budgeting plans. You first need to establish spending categories such as bills, gas, and groceries. Then, allot a certain amount of money to spend in each category per month.
The traditional method involves labeling envelopes for each category and withdrawing cash to fill these envelopes. When the money in that envelope runs out, you can’t take it from another. If you have money left over you can keep it in that category for the next month or transfer it to a savings account or emergency fund.
A more modern take involves using envelope plan apps. This allows people to stick to their budget in a more technologically-friendly way.
3. Zero-Based Budgeting
The zero-based budgeting strategy is one of the best budgeting options for someone with a consistent paycheck. This plan accounts for every dollar in your paycheck and allocates it to a spending category so at the end of the month you have no money left over.
Benefits include preventing overspending, offering visibility for where your money goes, and prioritizing financial goals. The cons are that it’s a bit time-consuming to create, doesn’t account for unexpected expenses, and may be hard for those with unpredictable incomes.
4. The Balanced Money Formula
This plan is also called the 50/30/20 budget, and it is one of the most popular budgeting plans. It allocates 50% of monthly income toward needs, 30% towards wants, and 20% towards financial goals.
The main benefit is that it’s an easy way to get a handle on finances, but you’ll have to work to continuously track your finances and it isn’t great for low-income people who may struggle to save 20%.
How Can I Keep Track Of My Budget?
An effective way to help with a budget is with pen and paper. Writing down every expense will force you to consider each purchase. There are also mobile apps that sync to your bank account to track your budget or manual entry methods like using an Excel spreadsheet on your computer.
Budgeting During A Financial Emergency
Financial emergencies are always unexpected, but preventative measures can be taken in the form of health insurance, life insurance, auto insurance, and natural disaster insurance like flood insurance.
It’s also a good idea to have an emergency fund that covers three to six months of living expenses, but this is not always possible. If you find yourself in a financial bind and need help quickly, you may want to consider certain loans that are available, such as title loans.
Title Loans For Financial Emergencies
In a financial emergency, you can get a loan with a car title quickly and easily for up to $15,000. All credit scores are welcome to apply and you could have your money by the end of that same day or the next business day.
General Requirements
All you need to apply for a title loan is a driver’s license or verified State I.D., your car’s lien-free title, and your car for inspection.
How To Apply
To request a loan with a car title, you can fill out an online form that will connect you with one of our title loan lenders’ websites, call 1-800-514-2274, or use the chat feature. One of our lenders’ representatives will call you to schedule an appointment at your chosen location to verify your car title and inspect your vehicle.
If approved, you will receive loan documents via email that require an e-signature. Once that’s done and if you’re approved, your money will be directly deposited into your bank account that day or the next work day.
Get Help Sticking To Your Budget Today
To stick to your budget, try the above budgeting plans to prioritize needs, debts, and savings. If you need help with a budget, especially in a financial emergency, a loan with a car title may also be for you. Check out our At Home Title Loans website to find out more today!
Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.
