The EASIEST Budget Method on the Planet

So, you decided to start budgeting. Welcome to adulthood. Now, the good news is is you don't need a NASA level launch plan for your money. In this video, I'm going to show you the easiest budgeting method that I personally use, and I'll give you a tutorial. Hey guys, it's Justine, your host of the DebtFree Millennials channel. Here we talk about all ways to crush debt and achieve financial confidence that leads to more fun and fewer payments. Now, the number one tool that helped me pay off $35,000 of debt on just a modest $37,000 income in less than 2 and 1/2 years was the budget. And when I was just starting out with my budget, I made it very easy. So, what's the easiest budget? Drum roll, please. It is the four Fs budget. The four Fs stand for fixed, fun, fudge, and future. Let me show you what that looks like. Okay, so when you're implementing a 4F's budget for the first time, again, easy mode, right? We're going to start with income and list our known income up at the top in a monthly basis. So, let's say you bring in $4,000 per month. The first place that I'm going to start with is the fixed subcategory. Fixed are budgeted items that are things that you have to pay for every single month, such as rent, your cell phone bill. So, I'm just going to start listing that underneath and it's going to look something like this. All right. So, once you have all of these listed out and you know these are the things that are my basic living expenses, then you're just going to write down the amount that you know. If you don't know how much you spend on things like insurance, utilities, or gas, or even groceries, I put groceries in fixed expenses because to me, it's something that I buy every single month. Even though this budget may fluctuate from time to time, and same with your gas bill, it's always a good idea to go back and do a spending average of the last 3 months of spending. So, you're going to go into your bank account or your credit card statements. You're going to add up the last three months of expenses and spending in that particular category, and then you're going to divide it by three to get the average. So, that's what I would do for things like groceries and some of the other things. The next section is fun. fun is any um nice to haves, but they're not essential. So, you don't need to spend money in this area, but I mean, come on, allow yourself some fun. So, things that typically go underneath the fun category are things like restaurants, shopping, and subscriptions. All right, so you can clearly add as many little line items as you want to the fund, but this should give you a baseline. The next F that you'll want to focus on is fudge. And no, this is not chocolate, but if it was, wow, can I come over? Fudge is your miscellaneous category. This is your buffer. So, you can use this anytime you forget something, like if you forget a birthday gift for your mom or you forgot about that prescription that you need to pick up. The miscellaneous category is your cushion. You can also use this as a place to move money if you want. So you can make a buffer of $75 and if you go over in a certain category, you can always borrow from the buffer. It gives you cushion for any of those things that you've forgotten about. And lastly, you want to take a look at putting money towards future expenses. So, every good budget includes a savings category for the future. So, you're going to include things like an emergency fund, vacations, I see a lot, um, new car, or any outside investing that you would do with after tax dollars like a Roth IRA or a brokerage account. So, you're going to want to include some of these things that you might be saving up for. Now, if you're asking Justine, what about my debt? Debt should definitely be included in your budget. I keep that as a separate section. So, you can include it up here up at the top. So, debt, I include it at the top because it's always top of mind for me and one of the biggest priorities financially that you should have when you're thinking about long-term success with your money. So, this could include student loans, credit cards, a car loan, a personal loan, and then you'll want to add in that minimum monthly payment here. Ideally, you'll be putting more money towards the debt, but at least a minimum will get you started. What you're going to do is you're going to add in all of those amounts for each of those budgeted items. You're going to add it up, and then you're going to subtract it from your income. So, your income minus expenses should net zero or as close to zero as possible. That's a zerobased budget. And that's the beauty of having the 4F's budget in play. You can keep this as high level or as specific as you want to, but the idea is you give your expenses a home. And then all of those expenses minus your income are going to either give you a net zero or if there's a negative number here, that means you're overspending somewhere in your budget needs adjusting. If there's a surplus amount here, that means you have extra cash to put towards other financial goals like your debt or your emergency fund or maybe even adding a little bit to your fun money spending. The beauty of this method is it gives you training wheels. The downside, it can be a bit of a manual process, especially finding your expenses and plugging them all in. But hey, Rome wasn't built in a day and neither was your budget. If you are brand new to budgeting or you're just simply wondering where the heck your paycheck is going every single month, this is a great way to start. This is like budgeting on easy mode. The 4F's budget, fixed, fun, fudge, and future is the easiest budget for beginners. It's personally the budget that I started with and I still use after over a decade of budgeting and paying off massive amounts of debt. It breaks down your expenses into four subcategories and you can keep it as high level or as specific as you want to which provides a lot of flexibility. So there's no problem, no sweat. Unless of course you are watching this at the gym, in which case multitasking respect. So would the 4s budget work for you? Drop your answer in the comments. And if you want to put the 4F's budget into action, you can actually do that by downloading my budget toolkit that has a complete template for you to fill out. You can head over to debtfreemillennials.com/toolkit or by using the link in the description box below to sign up for free. Now you can watch even more budget beginnerfriendly videos right here on the channel so you can find what method works best for you. and I'll catch you in the next