Budgeting requires time and effort. Iโ€™m not going to lie, but the most effective way to get out of debt faster is by developing a budgeting technique and sticking to it.

Choose one and do your best to stick to it for at least 3-5 months, then evaluate your results.

4 budgeting techniques that can help you crush debt:

  1. ๐™๐ž๐ซ๐จ-๐๐š๐ฌ๐ž๐ ๐๐ฎ๐๐ ๐ž๐ญ๐ข๐ง๐ : By far my fav one. Here you will assign a job to every dollar that comes into your bank account before payday.ย ย 

You need to make your budget equals zero. Remember it doesnโ€™t mean that the balance in your bank account should be zero.ย ย 

2.ย ๐Ÿ“๐ŸŽ/๐Ÿ‘๐ŸŽ/๐Ÿ๐ŸŽ: divide your paycheck according to 50% needs, 30% wants, and 20% saving.

3. ๐‚๐š๐ฌ๐ก ๐จ๐ง๐ฅ๐ฒ: if you are into the cash envelope system and want to track every cent to the penny, then use cash to pay for all your expenses. This could be highly effective. It just requires time in planning and getting your family on board.

4.ย ๐๐š๐ซ๐ž-๐๐จ๐ง๐ž๐ฌ ๐›๐ฎ๐๐ ๐ž๐ญ๐ข๐ง๐ : this is your emergency type of budget. Here you will calculate how much you will need to cover your necessary expenses for a couple of months while you can get back on your feet.

How to Divide your Paycheck

Assign a task to every dollar you make. A key tip to paying off debt in a short period of time is to know what your money will do before it hits your bank account.

Here are the distributions that I think can help you:

  1. Housing: 25%
  2. Retirement: 15%
  3. Healthcare: 10%
  4. Food & utilities: 25%
  5. Savings: 10%
  6. Personal 5-10%

If you want to be more aggressive, you can reduce your personal expenses to 5% and add the difference to your savings and work on building your emergency fund.


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