The Key to a Good Budget Is Minimalism

Girl holding PSCU debit cardHere are a few tips for creating a simple, low tech, budget.

The easiest way to abandon your budget? Make it complicated and tedious. A minimalist budget can help you clarify your financial goals, provide you guidance on how to meet them, and allow you the freedom to spend a little on yourself. To keep your budget from growing too unwieldy, try these three methods:

  1. Set up a multiple accounts. Open multiple accounts and give them names for the different categories you’re budgeting for — main account, emergency savings, vacation, etc. This allows you to easily shuffle money back and forth between them as needed;
  2. Have a “spend on whatever I want” category. Decide on a set amount you get to spend on whatever you want each month. As long as you’re setting aside enough for expenses, savings, and needs, this gives you some freedom to indulge without the guilt; and
  3. Keep the budget simple. Making it as simple as possible will help you stick to it. In her book All Your Worth: The Ultimate Lifetime Money Plan,S. Sen. Elizabeth Warren (D-Mass.) recommends allocating your paycheck—assuming taxes and retirement savings have been automatically deducted—accordingly: 50% to needs (bills and groceries), 30% to wants (clothes and entertainment), and 20% to saving or paying down debt.

These guidelines can help making budgeting easier, but they also assume you’re doing relatively OK financially and have a steady income. If you’re drowning in debt or your income is irregular, you’ll have to adjust your priorities accordingly. (Remember to visit Public Service Credit Union if you’re having trouble wrangling your daily finances.) Otherwise, keep your budget simple and uncluttered, and you’ll find it easy to follow.