Topic: Methods
5 posts tagged “Methods”.
The 50/30/20 Rule, Explained
The simplest budget worth knowing: spend half your take-home pay on needs, up to a third on wants, and save the rest. Senator Elizabeth Warren popularised it as a starting framework — here is how it works, and where it strains in a high-cost city.
Zero-Based Budgeting: Give Every Dollar a Job
A more hands-on method than a simple ratio: assign every dollar of income a specific job until nothing is left unassigned. Income minus everything equals zero — not because you spent it all, but because you decided where all of it goes, including savings.
Spend on What You Love, Cut the Rest
Ramit Sethi's "conscious spending plan" rejects penny-pinching every category in favour of a blunter rule: spend extravagantly on the few things you truly love, and cut costs mercilessly on everything you don't. It works because it is built to be enjoyed, not endured.
Sinking Funds: Saving Ahead for Known Bills
The lumpy bills you know are coming — insurance premiums, road tax, the year-end trip — wreck budgets only because you wait for them. A sinking fund smooths them out: save a little each month into a named pot, so the big bill is already paid for when it lands.
The Anti-Budget: Save First, Spend the Rest
If tracking every dollar fills you with dread, the anti-budget is for you. It has one rule: automate your savings off the top, then spend whatever is left however you like — no categories, no logging, no guilt. Less control, far more likely to actually happen.