Are you like me who does not have money left in the bank account at the end of the month and you have to survive on the bare minimum. Do you spend your money without properly planning your expenses? Do you want to invest more and start to create wealth? Then this article is for you. 

My problem is that I do not allocate proper funds for my expenses and spend money as I see fit. I have some Mutual Funds and Insurance but I want to create more wealth. But because of poor budgeting, the problem of funds shortage persists. 

Feed up from the fact that I have to face this issue of money shortage at the end of every month. I took to the internet to find solutions. There are various budgeting techniques out in the world. But there is no guarantee that implementing a technique that has worked for someone will also work for you. Therefore it is always important that you learn from these techniques and create your own budget by selecting the best method which suits you.

Following are the methods which I came across:

The Balanced Money Formula: In this method, you separate your funds in a proportion of 50-30-20 percentage. You allocate 50% of total income to your needs, 30% to wants, and 20% to saving/investment. 

Your needs consist of very essential things such as food, utilities, clothing, groceries, electricity bills, phone bills, internet bills, etc. These are the basic things which you need to live. These are expenses you are needed to make so that you have a defined standard of living. This does not mean you start ordering food online every other day.

Your wants are pretty much everything else. Like buying new expensive shoes, clothes, new PS4 games, the latest iPhone, etc. They are things which you can leave without.

Your saving/investments should include your retirement goals, emergency funds, short term, and long-term financial goals.

By allocating a specific amount to every category you eliminate the risk of overspending. You know how much you are allowed to spend on each category and this makes things very easy.

The Compartment Budgeting: In this method, you separate your cash into various compartments. These compartments can be anything like envelopes, different bank accounts, various digital payment wallets. What you do is label one compartment for one specific category and then use money stored in that account only for that mentioned category. For example, if you know that you need 5000 to buy a month's worth of groceries, you will then put the mentioned amount in the specified compartment. Try to allocate the funds at the start of the month and then stick to this amount, don’t overspend on any category unless and until it's an emergency. 

The “No Budget” Budget: In this method, you manage all your fixed expenses and savings. You know what amount is needed every month to pay your essential bills so put this fixed amount aside. Also according to your future planning, you might have a certain amount in your mind that you need to save, put this fixed amount aside as well. Then the remaining money is to be used as you see fit.

If you can automate the bill payments and automate your savings you might not have to remember to budget ever again. The catch is that you need to maintain the same amount of spending habits and also prioritize saving a substantial amount of money. So in some circumstances, you do overspend in one month, the money you saved in previous months will help.

I am currency following the 50-30-20 rule with little modification. I am currently saving/investing 30% of my income and sometimes also increasing its percentage which is taken from my 20% allotted to the wants. I have very few wants these days as I am spending most of my time at home.

If you do sit down and figure out your finance and use any above-mentioned methods. Do let me know in the comments below.

If you have a unique method of your own, do share that in the comments. I would really like to see how others are managing their finances.