3 Great Budgeting Strategies to Try This Year

We all know that budgeting is a great way to get control over our financial situation.

Unfortunately, budgeting plans don't always work straight away. Whether it's an unrealistic goal holding you back, or simply a poor strategy, the most important thing to remember about money management is that everyone can regain good financial health, all they need to do is find the right plan.

The way you handle your money will depend on numerous things, including where you are in life, what your current goals are, and what your income looks like. Remember, there's no one-size-fits-all budgeting strategy.

Here are a few options that you can try if your first attempt at budgeting doesn't work out.

1. The Envelope System
The envelope system is probably one of the most popular, and well-known budgeting strategies out there today, but it's also one of the most effective. With the envelope system, you simply do most of your spending using cash. You can set your monthly mills like your mortgage and utilities to come out of your bank account automatically, but every day spends like grocery shopping and clothing purchases come from cash only.

The cash envelopes system works well for people who are already in debt and need to figure out how to control their spending. It's all too easy to over spend when all you need to do is flash a contactless card or type in a pin number, because you don't see the cash physically leaving your possession.

Sorting the exact amount of cash you have each month into envelopes for different spending requirements also means that you're less likely to overspend and dip into your savings. When you only have a certain amount of cash to use whenever you spend, you're likely to be more careful about how and when you choose to buy things.

2. Digital Budgeting
If you're a tech savvy person, then you might be attracted to a budgeting strategy that helps you to make the most of your smart phone and computer. With a digital budgeting strategy, you decide at the start of each month how you want to spend your cash. This means that you initially take the "must have" expenses out of your wages, like rent and gas bills, then sort the remaining money into categories like "entertainment", "clothes" and "savings"

There are apps available online where you can allocate certain amounts towards each expense, then track the money that comes out of your bank account to see whether you're keeping yourself on the right track. The great thing about digital budgeting is that it allows you to keep highly accurate records of your spending. The more you learn about your spending habits, the easier it is to change them.

Keep in mind that some budgeting apps are free, while others can be quite expensive. Check your options carefully before you commit to anything. If digital budgeting isn't right for you, you can still manage your money in a similar way without the apps. Simply set aside a certain portion of your cash for savings, bills, and expenses each month, and use bank statements and regular mini-statements to track your expenses. The idea is to make sure you're as informed as possible about your financial situation.

3. The Multi-Bank Strategy
The multi-bank budgeting strategy is a lot like the envelope system - only more secure. It asks you to separate your money into different bank accounts depending on how you're going to use it. For instance, you start with a single over-arching bank account where all your monthly wages go into. You can also use this initial bank account to pay essential bills that can automatically withdraw money each month.

Once you've finished paying for all your bills (hopefully in the first week of the month). You pay yourself a certain amount of cash into different bank accounts. For instance, you might send 20% of your remaining income to an account dedicated to savings, and 30% into an account that's for entertainment, clothes, and other irregular expenses.

Some people have even more bank accounts set up to help them pay for essentials like food shopping. It's important to make sure that if you're taking this route, you know how many accounts your bank is comfortable with you having at any given time. It will also be useful to set up online banking, so you can keep track of your balance in every account. Make sure you talk to your bank about setting up an account with the best returns for your savings too.
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