Budgeting strategy by Villafuerte

#species/thought #status/seedling

The following steps are Fitz Villafuerte's budgeting strategy:

  1. List all income received last month.
  2. List all expected needs or necessary expenses for the coming month.
  3. Income - 30% Savings = Available Budget (Note: Savings = Cash + Investment Fund).
  4. Available Budget - Needs = Wants (Option: Instead of spending all of what’s left on Wants, just add money to Savings)

Scenario 1: If Available Budget < Needs then lower Savings rate (Assumption: Needs are all necessary expenses)

Scenario 2: If Available Budget < Needs and Savings Rate = 0 then create extra Income (Note: Ignore this scenario and you will end up in a lot of debt)

I won’t necessarily follow this process since I am still trying to apply Your Money or Your Life by Robin and Dominguez. But I'll kep this on hand if things change in the future.

Related

References

Ready To Be Rich. (2021, March 24). How I Budget My Money Every Month. https://www.youtube.com/watch?v=AT97JqFUktc