Find it is hard to keep a budget? Even when you try keeping a budget, it isn’t easy to stick to the plan. This has nothing to do with your willpower. 

For budgeting, the most popular rule is the 50-30-20 rule. The 50-30-20 rule puts 50% of your net income (after-tax) towards fixed expenses like housing and bills. 20% should then go to savings to meet your financial goals, like saving for retirement. Finally, 30% can be allocated to fun stuff like dining and shopping. 

Option 1: 50-30-20 Rule 

50% – Fixed Expenses

30% – Entertainments (Guilt-Free Fund!)

20% – Savings

There is a more simplified rule like the 80-20 rule, in which you use 20% of your net income (after-tax) for savings, then spend 80% on everything else. You may want to adjust the rules or make a budget that’s more tailored to your situation.

Option 2: 80/20 Rule 

80% – Fixed Expenses + Entertainments (Guilt-Free Fund!)

20% – Savings

We need to adjust how we think of budgeting. Instead of working out a detailed household or personal financial budget, here are a few alternative ways to develop a budget that fits your real life. 

Determine your spending pattern

Basically, you should be able to know you are a Saver or a Spender. If you are a Saver, you probably have already worked out or had some control of your finance, so you need to review your financial goals and see any need to optimize your spending or adjust your rules to hit your financial goals faster. 

However, if you are a Spender, you need some forms of control and hence, budgeting. It would be best if you started tracking where you spend your money for a month to have a good idea of which “rule of thumb” is workable for you. You can assess your cash flow by listing down your incomes and expenses and categorizing them to determine your monthly and annual cash flow. 

Cash Flow Statement (Download Excel)

List down your incomes and expenses, and categorize them to help determine your monthly and annual cash flow. 

If you tend to be forgetful to jot down where you spend your money or find it tedious to do so, you should have a rough gauge of a percentage where you spend your money on and work from there. Else, simple, use the 80/20 rule, 20% savings, and the rest to everything else. 

Don’t Go by Month, Think Yearly

Estimates of monthly expenses may tend to the shortfall, and there is less motivation without a financial goal you want to achieve. Have a short-term plan of 1 year provides a more realistic financial picture, and most importantly, you work towards a goal.

To start, you can base on your previous year earning income after tax (less bonus as it may vary year by year), determine or set an amount (or a percentage) of how much you want to save for the full year. For instance, if your previous year’s annual income after tax excludes bonus is $40,000, and you want to target to save 20%, this is equal to $8,000. This means you will have to save around $670 a month. You can then automate the recurrence of this monthly transfer of $670 to your saving account. And whatever leftover, it will be your fixed expenses and guilt-free fund (“fun money”). 

Don’t Budget, Instead Bucket

To stick to a budget is like restricting yourself, and there is a high chance you will not go with the plan. It is inflexible, and you don’t enjoy your hard-earned money. There is a more straightforward approach that is to switch your mindset of budgeting to bucketing. The most basic way is to funnel your net income (after-tax) into 2 “buckets” – bank accounts. One is for your fixed expenses (bills and daily expenses) and guilt-free, aka fun money, and another one is for your savings. The saving account should be pre-determined or fixed transfer and non-touchable. 

Automate your spending as much as possible

Set up your bills and other payments like rent using free online service/apps or with a reliable no-fee bank, i.e., automatic bank transfer or payments. Also, you may want to set up automatic savings into another account or some saving plans. Please make sure they are set up, and all are happening on the day you get your paycheck of the month. One important point to note, make sure you pay all the credit cards bill in full amounts without incurring interest. It’s good to have your credit cards link to your bank account so you can set up automatic payments without the worries you forget to make the payment, and it is a free service. This will leave a little leftover that you can use for guilt-free spending and cash withdrawals.

Just Big Categories, Forget Details

It is always too tedious to break down into sub-categories or different categories of your spending. Many times, you will find it a hassle and give up budgeting. To make your life simple, you don’t need to further break down as long you have set up automation of all your bills and savings, whatever balance will be the guilt-free spending money you can you. 


You can automate all your expenses and savings. With your automation set up, you are free to spend the money as you like every month since you have already proportioned off your savings. And this means you can juggle how you want to spend the money each month. 

Ultimately, the key to good and successful budgeting is SUSTAINABILITY. You must be able to sustain what you want to set up for yourself and keep it long-term.

You don’t have to stress yourself over budgeting. Sometimes simple actions like these and habits can do wonders and help you sustain in a long way.

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