As the world economy stagnates and people continue to struggle financially, proper money management becomes a crucial issue. Budgeting is one tool for improving fiscal responsibility. But for some, just the word "budget" makes their eyes glaze over.
For those who hate the thought of crunching budget numbers, consider an alternative- the No-Brain, No-Pain budget.
Simplified Budgeting for the Masses
Ismat Sarah Mangla, in an article from Money magazine (June 2009) entitled "Discover Your Budget Style," says that this plan (sometimes called the the Bucket Budget or First Step Cash Management) is simple to establish and, once set up, runs mostly on auto-pilot. Just follow the process below for simple, effective, "brainless" budgeting.
- Set up three bank accounts- one should be a savings account (the higher the yield the better), and the others should be basic checking accounts. Establish a savings figure- how much of each paycheck will be routed into savings. This is money to be used for emergencies, or for long-term goals like a vacation or a new car. Direct the payroll department to automatically deduct that amount from each paycheck and send it to the savings account.
- Have the remainder of each check direct-deposited to the first checking account. This account is for paying fixed monthly expenses, like utility and house payments. Most banks offer automatic bill payment options. Use them. It makes the process even more of a no-brainer.
- Calculate how much is left over after paying recurring expenses. Divide this amount by four. Have the bank deposit this amount to the second checking account every week. For example, if four hundred dollars is left over after recurring bills have been paid, then four hundred dollars divided by four equals one hundred dollars to be sent to the second checking account each week of the month. Pay variable expenses (gas, groceries, entertainment) from this checking account.
A couple of caveats. First, using credit cards is a no-no. And second, no transferring of money from the first checking account to the second until the next week.
Family Budgeting Made Easy
This budget system is simple and effective for folks who hate managing money. Since account deposits have been pre-allocated based on each family's personal reality check, the only thing people have to watch out for is depleting the balance of the second checking account. The system pares take-home pay to the bone, and helps make sure that folks "color within the lines" with their spending.
The No-Brain, No-Pain Budget lays the whole brain-busting budget monster to rest. The bills get paid, and people see tangible rewards in an increased savings account balance.
So throw those money management concerns into a bucket, and never worry about budgeting again. The No-Brain, No-Pain Budget is the "brain-less" way to allocate cash resources.
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