Budget Enthusiasts Super Simple Budgeting Method Everyone Needs To Be Using

Welcome back friends!


Today we will share the best kept secret. Empower Your Budgets world's simplest budgeting method. Yes, the simplest method ever! Guess what? You do not need a fancy spread sheet or complicated report. Instead gather your bank statement and a calculator. That's all! Are you ready?


Steps

There are three simple steps and it takes all the hassle out of all budgeting and money management. Three… Yes, THREE easy to break down steps! While this is a great baseline budgeting option please be mindful that these steps are very general. Different situations and factors will mean your budget may not be the exact same as ours. These variations will be talked about below, but for more questions please make sure to reach out!


Now let’s get to the steps:

  1. Gather Your Information

  2. Calculate Your Allowed Spending

  3. Don’t Spend More Than You Have!

Sounds easy right? Do not worry we will break it down and soon you'll be budgeting!


Gather Your Information

The first step is to gather your information. For this method you must know your monthly income and expenses.


Let's find your monthly take home income. For those paid on a salary and have a set amount, checking your last paystub will work perfectly for your income. In short, if you have a salary just use your monthly take home income. If you do not have a consistent income try taking an average of a set number of months, this period could be anywhere from three to twelve months.


Now that we have our income found we must find out your total expenses. This is where your bank statements will come in handy. The easiest way to find your total expenses is to average out a few months. Much like an inconsistent income we suggest at least three months. However the more the better.


Now we understand the up front calculations are a lot, however guess what? After you do this budgeting method no changes need to be made! How great is that! However keep in mind if your financial goals change rethinking the amount you spend may increase or decrease.


Great, now you should have two numbers: your income and your expenses. Let’s calculate your allowed spending. First thing is to make sure your income is equal or greater than your expenses. This is very important! If your expenses are more than your income you are in debt and will own more than you have. Looking at past expenses it is good to see if there are small or large changes that you can cut out to reduce spending. If your expenses are now less than or equal (or already were) you can see if money can be used in other ways to pay off more debt, put into savings or invest. Your allowed spending should be enough to cover your basic spending needs but be less than your income. This surplus will be used to repay debt, build a savings fund, and or invest. For a better understanding the example section will expand on this idea.


Lastly and a key concept DON’T SPEND MORE THAN YOU HAVE! Yes, yes, it is repetitive but sticking to this method and practicing good money habits like this will pay off in the long run. The number one money problem people suffer from is debt. How does this happen? Easy spending more than they have. This simple habit of not spending more than you have a strong financial power that will pay off in the long run. A budget will not restrict your budget but empower you to have control over your money and free yourself financially.


Example

Now that you have seen the steps, let's work through an example. Hopefully by the end this method will be clear and you can start creating your own personalized budget. Keep reading after the example for answers to different situations and how it may apply to your life! This example will be from a recent college graduate who has a salary of $55,000 and pretty consistent expenses.


First step is to gather all the information. (This information will be from January 2021 to October 2021. Empower Your Budget suggests at least three months of data for an average, but the choice is up to the budgeter!


Income

Expenses

To find the take home pay we plugged some numbers into a calculator. Check it out below!

These statistics are found on SoFi Learn. Check it out here!

(The state income tax rate is the average of all states. Check out the data here!)

​Housing: $1,100 (An average was taken for the numbers of a single apartment. The result was around $1,100.)

With a salary of $55,00 getting paid biweekly on can expect a pay check of: $1,677.03 so in one month this is about $3,350/month.

Transportation: $820 Health Care: $380 (Again an average was taken) Groceries: $200 Cell Phone: $40

*Please keep in mind this is without contributing to your 401k! We advise putting in the maximum amount to match your employee benefit. If you are not sure, reach out to HR and ask!

Now with the basic necessities let’s see where we stand! The total expenses so far come out to be… $2,540. This means $800 is left over for wants and other expenses.

Now before we get to the wants we should touch base on debt, savings, and investing. With this in mind no money was set aside into a 401K before the final paycheck. This can be seen as there were no deductions. The first step would be to (again as stated before) putting in the maximum amount to match your employee benefit. But back to this $800, making sure any high interest paying debts are paid off as soon as possible is a must. This mainly means paying off those credit cards!!! IN FULL. But with this extra money some can be spent on yourself and personal spending but we recommend saving into an emergency fund and investing the money instead this will continue to grow and over the long run have your money work for you.


So $2,540 is spent on necessities and we put aside $300 for personal spending with $500 for debt, savings and investments… great! So what do I do now? Well we have the prime number we can spend for the month. This is $2,540 + $300 so $2,840. This is the allowed amount you are able to spend. The catch? YOU CAN NOT GO OVER THIS AMOUNT. Once this is set one must stick to their budget! If something would happen that is what an emergency fund is set aside to protect. (An emergency fund is a built up savings of three to six month allotted in case of emergencies).


Variations

While there are many ways to make sure you don’t overspend, Empower Your Budget’s favorite way is using a credit card. DON’T CLICK AWAY… for those who do not like or want to use credit cards stay turned for other ways to use this method. Back to the credit card, we like this method as it is simple, straightforward and when used correctly reaps the benefits of a card without any fees or interest rates.


With this set monthly expense amount one must stick to this number and this is the amount they are able to spend on their card. (Of course if the expenses are too much or you get penalized for using your card just use money from your checking account.) However at the end of the day you should only be spending your allocated number you set in your budget. Going back to the perks of credit cards, since we budgeted and will have the amount we can always pay this back IN FULL helping to grow our credit score and not get penalized for any fees/ interest rates.


The hassle of cards can be a lot however and many many not want to even attempt this and that is okay. The next best method is having a debit card. This is the exact same method as a credit card accepts debit cards are more accepted not having extra fee and high interest rates as it is your money. As long as you always have enough money in the account there are no downfalls to a debit card.


With either of these methods cards nowadays have apps making it easy to see and track every month how much you are spending and saving making it easy to see an overall picture. However if you are still confused about this method make sure to drop a comment down below, email us at meganlynlife@gmail.com, or contact us and we will help you out!


Products

As we developed this method it is so easy to be lost and confused at first, so Empower Your Budget made it the first product to sell online! We are so excited and can not wait to see how you all love it and use it! How for the reveal…

Are you excited? Us too. We hope you love it. To give us any comments, suggestions or to pre order click HERE or click the ‘Products’ tab under the ‘Templates’ option from the above menu. We hope you enjoy and can't wait to share some fun behind the scenes and packing videos for you all!


Takeaways

Budgeting, personal finance, and money management topics many people don’t like to talk about but are vital and necessary to our everyday life. Today we talked about Empower Your Budget’s most simplest budgeting technique ever. In three steps you will have a budget that empowers you to make smart choices and enable allocating funds to things that serve a purpose to you. Step one is to gather your information. This is your income and expenses. From this you get to step two and can look at the numbers and calculate a number for your allowed spending. Lastly and very important… step three: DON’T SPEND MORE THAN YOU HAVE. People don’t like to budget because they think the money they have earned is getting restricted. Instead one is optimizing a dollar to its full use by understanding each dollar and where to spend, save, invest it.


Contact

Empower Your Budget loves budgeting and hope with this method you do too! Make sure to put any questions or comments down below! If you have any personal questions or just want to talk check out our ‘Contact’ tab or click here!


Remember

Master your money so money cannot master you.