If Your Budget Isn’t Working, Here’s Why

The best budgeting framework for today’s economy.
Is your budget working? The 50/30/20 budgeting rule - one of the most popular budgeting methods that has been around for 20 years - was created by Elizabeth Warren (yes, that Elizabeth Warren) and has largely been seen as the “gold standard” of budgeting ever since. But does it work for today’s economy? There’s also reverse budgeting, which we use in our Finance Fixx program (www.financefixx.com/s/), and has helped our participants save an average of $1,500. The point is, we have options, and our goal with our money should always be to find the one that works best for us - especially when our budget isn’t working the way we need it to
This week, we’re talking about 60/20/20 budgeting with Sean Pyles, host of the Smart Money podcast from NerdWallet ( @nerdwallet ). He shares why he thinks this budget is a better framework to follow, and how we can all make budgeting just a little more fun.
Chapters:
00:00 The 50-30-20 Budgeting Rule
03:19 Different Perspectives on Budgeting
08:48 Adjusting Budgeting Categories for High-Cost Areas
12:10 Cash Stuffing and the Fun Side of Budgeting
20:04 Considerations for Buying an Electric Car
24:53 Managing High-Interest Credit Card Debt
Takeaways:
- Budgeting is not one-size-fits-all and should be tailored to individual circumstances and preferences.
- Tracking spending can help identify areas where expenses can be reduced or optimized.
Consider alternative budgeting methods, such as budgeting backward or using the spending and savings bucket method.
- In high-cost areas, it may be necessary to adjust budgeting percentages to accommodate higher expenses.
- When dealing with high-interest credit card debt, explore options like negotiating lower interest rates or considering a balance transfer or debt consolidation.
When buying an electric car, consider factors such as charging infrastructure and range anxiety.
- Explore not-for-profit credit counseling agencies for assistance with managing credit card debt.
More money news when you need it! Get the latest and greatest updates on all things investing, budgeting, and making money. Subscribe to the HerMoney newsletter at hermoney.com/subscribe/!
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