The Budget Melodrama

The Synopsis

Sirens are presumably familiar to everyone who has read Greek mythology. The melodies of these mythological half-bird, half-woman creatures enticed mariners. If the sailors couldn't resist the Siren's singing, they'd fall into a trap and crash their ship onto the rocks. The Argonauts, a group of Greek heroes, devised a solution. They brought Orpheus, a musician, along on one of their journeys. How did it assist you? Orpheus, on the other hand, played loud music on his lyre, drowning out the Sirens' songs. The sailors were preoccupied. The Sirens did not seduce them, and the ship arrived in safe harbour.

What's this, we're talking about Greek mythology? There's a reason behind that. Consider the Siren song to be the new pair of shoes you've been admiring, or a brand new phone...anything that tempts you to spend your hard-earned cash. You'll need a weapon like Orpheus' to battle that temptation. That is a reasonable budget for you. And, believe it or not, you won't be able to resist it in your thoughts. You'll need to write it down.

However, a one-size-fits-all approach to budgeting will not work for our specific circumstances. Another Greek musician may have used the kithara to combat the Sirens as Orpheus played the lyre. Similarly, all you have to do is discover a budget that works for you! Let's have a look at three different approaches.

The technique based on percentages

One of the most prevalent budgeting guidelines is the 50–30–20 rule. It's something we've previously discussed. You set aside 50% of your monthly take-home pay in a "Adulting" account to cover expenses such as rent, food, and other expenditures. 30% of your budget is allocated to the "Splurge" bucket, which allows you to indulge in the finer things in life. And 20% goes to the "Future you" bucket, where you save for your long-term ambitions.

However, keep in mind that this divide isn't for everyone. You must figure out what works best for you. You may have returned to your hometown due to remote job and no longer pay rent. Alternatively, you may believe that spending 30% of your salary on movies or restaurants is a huge waste of money. Perhaps you have huge plans for the future and wish to put money aside. The advantage of the % technique is that you may divide it whatever you like. All you have to do now is figure out what works for you. Perhaps a budget of 40–30–20–10 works best for you. The first 40% is set aside for "Future You." The remaining 30% is for rent or a property loan. A additional 20% is set aside for food and other expenses. The remaining 10% is set aside for "splurging."

You see, you can change it up as much as you want to fit your lifestyle and objectives.

2. Using an envelope

There are several advantages to living in the digital age. However, when it comes to money management, it may be disastrous. For certain purchases, we use cash, for others, we swipe a debit card, or we scan a QR code and pay using UPI. Then you'll have to rely on credit cards for everything else. Sure, there are programmes that attempt to keep track of everything and perform the tedious work of correctly segmenting your expenditure. It's easy to spend when you don't see actual "currency" coming out of your pocket right away.

That's why purists insist on using the envelope approach. A budgeting technique in which cash reigns supreme. All you have to do is withdraw your whole income from your bank account as soon as you get it. Take the money and divide it into three envelopes: Adulting, Splurging, and Future You. Dip into the envelope whenever you need money for anything that meets the category and utilise the cash that's left in it. It's particularly helpful for someone who is just getting started with budgeting and is prone to impulsive card swipes. After all, studies indicate that the agony of real money going from your pocket causes you to spend less.

PS: If you don't have a debit card, you may always deposit the "Future You" envelope into a bank account. Then, as the following step, decide where to put the money.

3. A budget based on zero Money

This is for you if you're a super-organized person who wants to go through every single line item in detail. So, the final goal is rather straightforward. You add up your monthly income and then start making a note of every single item you can think of— pet treats, Spotify subscriptions, daily coffee quotas, haircuts, everything! Remember to mention any debts you may have, including credit card payments.

If you still have money left over, put it towards an emergency fund or purchasing a bicycle. The goal is to reach 0 at the end of the month. You may start distributing your money even before you spend it this way. And this little act of forethought may have a significant impact on your own finances. It may assist you in determining where you're spending the most and decluttering your life.

You may not be sure which strategy is ideal for you just yet. So give it a go and you'll see what I mean. Also, many of you responded with detailed explanations of how budgeting might seem to be exhausting effort. So, if you're looking for something a little more laid-back, check out this other piece. Check it out as well. 

(Source: Finshots)