There’s more than one way to manage your budget. Many people assume that a budget is one of those things that’s essentially one-size-fits-all. You put as much of your cash into your savings and possible and try to make sure that you’re living within your means. However, that’s not the only option.

The traditional budget is one of the most common cash plans, and it allows you to list your income and expenses, then simply set goals for how much you want to spend in each category. The good thing about this budgetary solution is that it’s extremely flexible.

However, it’s not always the best option for people who need more structure in their lives.
Here are some alternative budgeting plans to consider if you think traditional budgeting might not be the right option for you.

The 50/30/20 Budget

The 50/30/20 budgeting plan is a simplified plan which allows you to break your expenses down into three separate categories: wants, needs, and savings. Around 50% of your income needs to go towards needs, while another 30% goes into wants and the remaining goes into the savings account you keep separate from the rest of your expenses.

If you want, you can swap the last two categories around, depending on how quickly you want to reach your savings goals. The more you invest into savings now, the faster you’ll accomplish reaching your targets for that new house or whatever you need to buy. If you don’t want to save and you’d prefer to get a loan from somewhere like Omacl.co.uk instead, then you can take the extra 10% you would put into savings, and you can spend that on the loan repayments. Just make sure that you’re not devoting more than 15% of your income to loans and debts.

The important thing to remember here is that there is a difference between wants and needs. Just because you’re spending 50% of your budget on needs, doesn’t mean you should allow yourself to go over the top on things like clothing and food because you “need” those items. You can get a good shirt for a decent price without having to spend a fortune on designer labels.

The 80/20 Budget

This is an even easier budget to manage than the one we mentioned above, because you only deal with two categories – savings, and the rest. 80% of your budget goes towards the things that you need and want to pay for, like your mortgage or rent and your council tax, as well as your phone bills and home expenses like gas and electricity. The rest of the money you make each month has to go into your savings account.

The 20% limit is the minimum for what you need to save. If you can’t put that much away towards your future and your retirement, among any other goals that you want to be prepared for, then you need to take a much closer look at the way you spend.

This is a good budgeting choice if you feel like you want to have more freedom over the wants and needs section of your payments each month. You can ensure that once you’ve put your money away towards saving, you don’t have to think too carefully about what’s a need and what’s a want.

The Sub-Savings Account Method

This is a slightly different spin on the 80/20 budget, and it means you can decide how much money you need to save by funnelling your cash into sub-savings accounts based on goals. You open various savings accounts and give each one a name based on what you want to save for. Then you can divide your savings amounts up based on how much you want to put towards each individual goal.

This could be a slightly trickier process depending on how many savings accounts your bank will actually allow you to open. If you can’t get multiple accounts yourself, then you could consider getting the money you would usually put towards savings out of the bank every month and dividing it into different savings jars. However, it’s important to ensure that you have a save place to store those jars – just in case.

Remember, with the sub-savings account method, you can also make things a little easier by using apps on your phone to track where your money is going. Most banks will offer these apps as standard these days. However, you don’t have to use tech unless you feel comfortable with it.

It’s a well-known fact that getting involved in real estate is still one of the best investments you can make. Despite Covid-19 damaging financial situations, property values remain high, and forecasts point out that this trend will continue for the foreseeable future.

If you’re considering starting your own property business, now is an excellent time to do so. Taking advantage of the current rental price growth and potential capital growth for the future will put a lot of green in your pocket. But where to start?

Investing in property can be complicated if you let it. With so many options out there like REIT’s, HMO’s and other assorted acronyms, you may be left dazed assessing your options. Each real estate opportunity has its own list of pros and cons, but the bottom line is you can’t really go wrong.

The best bet, though, is to invest directly in real estate and avoid buying shares in properties. The stock market can be a wild beast, especially in uncertain times like 2020; there is no guarantee your money is safe. Investing directly in real estate will mean you can enjoy the rent as mentioned earlier and capital growth.

When considering starting a property business, one of the first forms of property you should consider is buy-to-let. Buy-to-let refers to the practice of buying a property with the purpose of renting it out. There are a number of reasons why buy-to-let is so ideal, but mainly it is safe. Through rent, you’re able to gain a regular income without having to work for it directly. Along with this, your property will increase in value day by day, meaning if you decide to sell it in the future, you will see a handsome profit.

It sounds like a dream scenario to continually earn money without directly working for it, but there are things to consider before you start. Firstly, research your area. You need to consider rental yields, capital growth, tenant demands, and predicted market changes. It may sound like a lot of work, but it’s worth it. For instance, there’s little point in investing in an area with depreciating house values. You may earn some short-term income, but you might make very little profit on your home when you want to sell. If you wish to start your own property business, you can look for further information and top tips from reputable property companies such as RWinvest.

Tenant demands are also vital. Covid-19 has led to a distinct change in what tenants want. With many stuck in their homes for months, people have started to notice faults in their homes and are craving new surroundings. Desires for green space, space to work from home, and fast broadband are all increasing. This is worth considering when purchasing a property, as you ideally want a property coveted by tenants.

You could also buy-to-sell. Essentially buy-to-lets riskier brother, buy-to-sell can be a bountiful venture. Also referred to as house flipping, the goal is to buy a property and sell it for a profit. Buying to sell is far more complicated than letting as it requires expert knowledge. You need to know exactly what a property is worth, the potential the property has for sale, and if the property needs any work done to it. If your venture goes wrong, and you pay extra for a property or are unable to sell, you will then have to contend with potential mortgage costs without the income to cover it. This can mean you lose cash rather than make it. If you are confident and have the expert knowledge required, it is something worth considering.

Overall, the best advice is to diversify your portfolio. If you want to become a landlord, buy multiple properties. This way, you can earn a constant and considerable income regularly. That early retirement you’ve always dreamed of can be more of a reality than you thought.