Are Any Budgeting Methods Even Feasible?
When people who make a living giving personal finance advice tell you that you should budget, it feels the same as when physicians in private practice tell you that you should diet. You work 80 hours per week, and another 10 commuting, and you could spend the other 38 on meal prep and traveling to and from supermarkets without a car, but that leaves you no time for sleep. You eat what is available with the resources you have, just like you spend with the resources you have. If you had a free checking account that didn’t charge you an account maintenance fee at the nadir of every pay period when your account was almost empty anyway, you would not need to use buy now pay later (BNPL) to buy groceries. Some popular budgeting strategies sound like they are made for people who have a lot more money than you and whose expenses are lower because they have more access to free stuff. For everyone else, budgeting is an exercise in frustration, because even when they pinch every penny, they still cannot afford necessities. The best way to stick to a budget or a diet is to set realistic goals and to accept that some days and some pay periods will be better than others. Even the best budget will not get you out of debt overnight. If you need bigger and faster solutions to your debt problems, contact a Miami debt lawyer.
The 50-20-30 Method Only Works If You Have a High Income
According to the 50-20-30 method, you should spend 50 percent of your budget on bills and 30 percent on fun stuff, while keeping the other 20 percent in savings. This only works if your income is high enough to bring prosperity; it is well beyond the means of most working Americans. Even if we replace savings with debt repayment or put debt repayment in the “fun” category instead of the “bills” category, most people cannot afford to follow this budget. You might be able to do it if you move out of your apartment at the end of your lease and live rent-free with your parents, but you are probably already living with relatives and paying every penny you earn to afford subsistence and avoid late fees.
The Envelope Method Assumes That Everyone Accepts Cash
Another popular method asks you to take your paycheck in cash and put the cash in envelopes for your various budget categories, never mind that it costs money to cash your paycheck. Can you pay your BNPL bills in cash? Didn’t think so. If you have time to take money out of the bank to put it in an envelope and then deposit it again before a creditor withdraws it on auto pay, you have time for a side hustle.
The Zero-Based Method Works Best With a Remainder
The easiest budgeting strategy only involves pen and paper or a spreadsheet. In the zero-based method, you write down how you will spend every penny. The problem with this method is that it does not leave room for the unexpected, so you should leave an “emergency expenses” category in your budget.
Work With a Debt Lawyer About Thinking Beyond the Budget
A South Florida debt lawyer if you are still in debt despite sticking to a budget. Contact Nowack & Olson, PLLC in Miami, Florida to discuss your case.
Source:
capitalone.com/learn-grow/money-management/financial-literacy/
