The Key to a Successful Budget Is Minimalism

4 Easy steps to create a simple, low-tech, minimalist budget.

Just mentioning the word ‘Budget’ can make even the most financially stable person cringe. We all can understand the benefits of knowing where you money is going. Yet, creating a budget and more importantly, sticking to a budget, can be quite a daunting task.

One of the easiest ways to abandon your budget is by making it complicated and tedious. A minimalist budget can help you clarify your financial goals, provide you guidance on how to meet them, and allow you the freedom to spend a little on yourself. To keep your budget from growing too unwieldy, try these four methods: 

1. Set up multiple accounts. Open multiple accounts and give them names for the different categories you’re budgeting for — main account, emergency savings, vacation, etc. This allows you to easily shuffle money back and forth between them as needed. Madison Credit Union offers Vacation Club and Christmas Club accounts for this exact purpose. 
2. Have a “spend on whatever I want” category. Decide on a set amount you get to spend on whatever you want each month. As long as you’re setting aside enough for expenses, savings, and needs, this gives you some freedom to indulge without the guilt. It’s almost as you are giving yourself a monthly allowance of fun money. 
3. Keep the budget simple. Making it as simple as possible will help you stick to it. A basic rule of thumb is to take your after tax/401K paycheck and split up in 50/30/20: 50% to needs (bills and groceries), 30% to wants (clothes and entertainment), and 20% to saving or paying down debt.
4. Keep your eye on the prize. You can make sticking to a budget more worthwhile if you have clear financial goals you want to achieve. For example, to take a nice vacation, buy a house or retire early. To help even more, print them our your goals and keep them where you can see them. This serves as a reminder when you are feel like quitting.

Just remember to keep things simple and find what works for you. Find your unique combination of techniques. Maybe you have a main checking account where you pay all your bills. From there you can have a portion of that money automatically split into a separate checking account for grocery, clothing and fun money. And into one or more more savings accounts. Then you don’t have to think about where to put money each month. It takes a little more setup at the beginning but keeps it simple down the road.

Here is a simple Budgeting Form and Financial Goals sheet we created to help you get started. Download and print them out here: Family Budget and Goals

These guidelines can help make budgeting easier, but they also assume you’re doing relatively okay financially and have a steady income. If you’re drowning in debt or your income is irregular, you’ll have to adjust your priorities accordingly. (Remember to visit Madison Credit Union if you’re having trouble wrangling your daily finances.) Otherwise, keep your budget simple and uncluttered, and you’ll find it easy to follow.