Best 3 Budgeting Strategies for BEGINNERS for 2024!

You don’t need an accounting degree to know the best 3 budgeting strategies and become a financial rockstar. Get ready to strap on your seatbelt and hold on tight, because we’re about to dive into the best budgeting strategies for any beginners for 2024! 

Based on my research, I will look at strategies that will make your head spin and your heart race with excitement as you realize the endless possibilities that await you. 

Key Takeaways

Key Takeaway	Description
Understanding Personal Budgeting	A budget is not just a plan for income and expenses; it serves as a roadmap for financial freedom, guiding individuals in making informed money decisions. Budgeting helps avoid overspending, accumulating debt, and prioritize spending.
Benefits of personal budgeting	Personal budgeting provides increased financial confidence which allows you to put more money for enjoyable activities, and reduces stress by banishing financial anxiety. It empowers individuals to take control of their finances and enjoy peace of mind.
50/30/20 budget strategy	The 50/30/20 budget strategy divides income into three categories: 50% for needs (essential expenses), 30% for wants (discretionary spending), and 20% for savings. It is a simple and effective tool that encourages savings, but it may not account for irregular expenses.
Envelope budget strategy	The Envelope budget strategy involves dividing income into categories and physically storing money in envelopes. It provides a clear and tangible way to manage money, promotes self-discipline, and helps prevent impulse spending, but it can be time-consuming.
Bi-weekly budget strategy	The bi-weekly budget strategy allows individuals to stay in sync with their financial rhythm. It provides a more accurate picture of money you have. It helps to stay on track with savings and enables adjustments based on changes in income or expenses. However, it may not be suitable for fluctuating incomes i.e commission base
Crisis budget strategy	A crisis budget is used during times of economic hardship and requires evaluating expenses and making cuts. It helps prioritize essential needs, which will facilitate positive changes in financial life, but it can be challenging and may lead to feelings of deprivation or social isolation.

Understanding Personal Budgeting.

Let’s understand the world of budgeting before we look at the different strategies. It’s important to understand the definition, why a budget is important and the benefit of having a budget. 

Definition of budgeting

Now, listen up and pay close attention. A budget is not just a mere plan for your income and expenses – it’s like a roadmap for your money that guides you to the promised land of financial freedom. It’s like having a personal GPS to locate your money. This is the key to making informed money decisions. 

Why is budgeting strategies important?

Why is budgeting important, you ask? Well, let me tell you, my friend – budgeting is not just important; it’s the superhero of personal finance! It’s like Batman to your Joker, Iron Man to your Thanos. With budgeting, you can avoid overspending and accumulating debt, and prioritize your spending like a boss. If you want to be a financial superhero and live the life of your dreams, then it’s time to embrace the superhero of personal finance – BUDGETING!

Related articles: Check out the article of “Fear of Spending Money“

Benefits of budgeting Strategies.

There are many good reasons for creating a personal budget. There are many experts that specifically talk about the benefit of having a personal budget. Below are a few examples of the benefits of having a budget.

Increased Financial Confidence.

When you’ve got a budget in place, you can strut around like a peacock with a new set of feathers! You know exactly where your money is going and it’s like you have a GPS on your money. You’ll feel like you can take on the world and conquer any financial challenge that comes your way.

More Money for the Fun Stuff.

Budgeting doesn’t mean sacrificing all the fun stuff in life. In fact, it’s quite the opposite! With a budget in place, you can actually allocate more money towards the things that bring you joy. Things like that new pair of shoes or that fancy dinner date you’ve been eyeing. So, go ahead and live your best life, my friend!

A Stress-Free Life.

Say goodbye to those sleepless nights and stressful days. Budgeting is like a magic wand that banishes financial stress and anxiety from your life. You’ll no longer be a slave to your finances, but rather the master of your own destiny. So, sit back, relax, and enjoy the peace of mind that comes with having a solid budget in place. Ahh, doesn’t that feel good?

How to get started with a budget?

Alright, let’s break it down! The simplest way to start your budget is to take your total expenses minus your total income.

First up, let’s look at your income. That sweet, sweet moolah you earn for all your hard work. Whether it’s from your hard-earned cash from your job, or investing in the stock market, or running your own business like a boss, or from a side hustle it all counts as income. 

Next up, is your expenses. It is all the things you spend your hard-earned cash on. We’re talking bills, entertainment (lunch, movies, restaurants, oh my!), and everything in between. Expenses can be divided into 2 parts essential and non-essential expenses. In other word, it can also be described as needs and wants.

Best budgeting strategies.

Based on my research, I am going to share with you a few budgeting strategies to manage your money. Below are the most popular budget strategies but it’s not a magic pill. You need to try it and see if it works for you. I will provide you with the information you need to make the right decision for you.

50/30/20

Now, I know what you’re thinking: “50/30/20? What is that?” But don’t worry, let me try to make it informative but also entertaining.

The 50/30/20 budget strategy breaks down into 3 categories: 

• 50% represents your needs. Your needs are items in your budget that you need to live. These items are rent, mortgage, utilities, groceries, fuel, petrol, insurance, phone bills, internet bills and also irregular expenses.
• 30% represents your wants. Your wants are discretionary spending which is things that are not essential like going out to the movies, takeout, and screaming subscription (Netflix, Spotify etc).
• 20% represents your savings. Your savings are for what you are saving for. It could be saving to buy a car, a deposit for a house, going on holiday or saving to invest.

Pros and Cons

Pros	Cons
👍It is a simple and effective tool for managing your money	👎It may be too restrictive for some people
👍It encourages savings	👎It doesn’t account for irregular expenses
👍It is a flexible tool to manage your budget
👍It’s easy to understand

This short YouTube video from Beacon Pointe explained the thumb rules of 50/30/20 Budgeting

The Envelope budget strategy.

The Envelope budget strategy is a tool that requires a long-term perspective and a high degree of self-discipline. Just like a sculptor who chips away at a block of marble to create a masterpiece. This budgeting method demands that you divide your income into various categories and store it in a physical envelope.

Pros and Cons

Pros	Cons
👍 It provides a clear and tangible way to manage money.	👎 It can be time-consuming
👍 It helps to prevent impulse spending	👎 Hard to stick to it incase of emergency or unexpected expenses.
👍 it promotes self-discipline in managing your money	👎 It is not suitable for people with irregular income
👍 It provides a sense of accountability and responsibility

The bi-weekly budget

The bi-weekly budget is like a finely-tuned instrument that allows you to stay in sync with your financial rhythm. It’s a budgeting method that requires a high degree of precision and discipline. It is great for people who earn their income every 2 weeks.

Pros and Cons

Pros	Cons
👍 It provides a more accurate picture of your cash flow.	👎 It may not be suitable for people with fluctuating incomes or those who need to track a large number of expenses.
👍 It helps you to stay on track with your savings.	👎It can be more complicated to manage if you earn a monthly wage.
👍 It allows you to adjust your budget more frequently, based on changes in your income or expenses.
👍 It encourage you to set aside funds for bills and expenses even if they are monthly or yearly.
👍 It helps you avoid overspending.

A crisis budget

A crisis budget is like a financial lifeboat that you use during tempestuous times of economic hardship, such as when you lose your job or experience a significant decrease in income. It’s a budgeting method that requires you to look at your expenses and make some cuts on unnecessary expenses. 

Pros and Cons

Pros	Cons
👍 Helps prioritize essential needs during financial hardship	👎Can be challenging and stressful
👍 Forces re-evaluation of priorities	👎Requires difficult decisions
👍 Facilitates positive changes in financial life	👎May lead to feelings of deprivation or social isolation
👍 Provides an opportunity for increased self-sufficiency

Final Thoughts 

A budget is not just a set of numbers, but a tool to unlock your power of money and help you transform your relationship with it. It may seem hard at the start but the reward is worth the effort. 

Having a budget means you take control of your money instead of letting it control you. It gives you the certainty to know where your money is going which is priceless.

We have explored several budget strategies, each with its unique approach to budgeting. The 50/30/20 budget, envelope budgeting, bi-weekly budgeting and crisis budgeting, each have their strengths and weaknesses. 

It does not matter which budgeting strategy you choose. It’s about being flexible, being persistent, and being patient in your approach. 

So, let us take this momentum and put our newfound knowledge into practice. Let us embrace the power of budgeting and take control of our finances. Let us start small, but dream big. Setting goals and work towards them, one budget at a time. 

Remember, budgeting is about creating a life that is fulfilling, both financially and personally. 

Let us continue to learn, grow, and thrive on this journey towards financial freedom. Let us make budgeting a habit, a ritual, a way of life. 

Tony Robbins quote, “It’s not about resources, it’s about resourcefulness”.

So let us be resourceful in our budgeting, and let us unleash our full potential.