When we aren’t helping you achieve financing ranging from a RV loans up to a car loan or even a fantastic mortgage loan, the pros at Wasatch Peaks are here to help you with basic budgeting areas. Personal or business budgeting isn’t always simple, particularly if you have several accounts to manage, and our pros are here to help.
Not everyone goes about budgeting their money in the same way, and there are a few different methods out there that are generally acceptable for doing this. Let’s go over some of the simplest examples of budgeting strategies to take with your money.
The zero-based budget involves accounting for every dollar you spend each month, then coming up with a zero balance by the end of a successful month. This doesn’t mean you have to drain your bank account every month, of course – it means you set aside a given monthly budget, then work only within that. The goal is to determine exactly where every dollar in your budget goes, which can help you determine your capacity to save for certain long-term purchases.
This is a cash-based method of budgeting that functions similarly to a zero-based budget in some ways. You itemize a list of items on your budget, then lay out the amount you’ll need to spend on that item.
From here, you obtain an envelope or other holder that holds cash for each distinct budgeting area. Once you’ve spent all the money in a given envelope – such as the “bills” envelope – you can no longer spend money on that category.
This is an approach where various expenses are split into three distinct categories, with percentages of your net pay (take-home money after taxes, insurance, etc.) then used to cover them as follows:
50 percent or less of net pay should go toward essentials, such as basic bills, mortgage payments, groceries and other items.
At least 20 percent of your net pay should go toward paying off debt or building savings
The remaining 30 percent or so can be used for extras at your discretion.
If you need help budgeting, Wasatch Peaks online banking is a great place to start. Our Peaks Money Manager helps you track your spending and build a budget, then allows you to monitor your spending changes. You can even set and oversee financial goals, like savings, retirement, and paying down debt.
For more on simple budgeting strategies to keep in mind, or to learn about any of our other financial services, speak to the pros at Wasatch Peaks today.