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Financial Education

The Key to a Successful Budget Is Minimalism

The easiest way to abandon your budget? Make it complicated and tedious.

Personal budget

Resembling a beautifully spare modernist home—all clean lines and uncluttered spaces—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 three methods:

* Set up a modern envelope system. Most online banking platforms allow you to open multiple accounts and give them names that correspond with the different categories you’re budgeting for—an update of the tried-and-true method of putting cash in different envelopes earmarked for specific expenses. Having multiple accounts allows you to easily shuttle money back and forth between them;

* Have a “spend on whatever I want” category. Agree 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 financial freedom and allows you to indulge “guilty pleasures” without the guilt; and

* Keep the budget simple. If you’re just starting out with a budget, making it as simple as possible will help you stick to it. In her book “All Your Worth: The Ultimate Lifetime Money Plan,” now-U.S. Sen. Elizabeth Warren (D-Mass.) recommends allocating your paycheck—assuming taxes and retirement savings have been automatically deducted—accordingly: 50% to needs (bills and groceries), 30% to wants (clothes and entertainment), and 20% to saving or paying down debt.

These guidelines can help making budgeting easier and feel less punitive, but they also assume you’re doing relatively OK financially and have a steady income. If you’re drowning in debt or your income is irregular, your priorities will need to adjust accordingly. Remember to visit SIU Credit Union if you’re having trouble wrangling your daily finances.

Otherwise, keep your budget simple and uncluttered, and you might find yourself actually using it.

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