Why You Should Not Follow Budgeting Guidelines Blindly!
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Let’s talk about budgeting and why it is dangerous to blindly follow budgeting guidelines.
At the end of the day, guidelines are just a general rule that should be taken into consideration but not followed blindly as there is no one size fits all budgeting plan that exists.
Common guidelines such as the 50/30/20 or 40/30/20/10 rules often fail to take into consideration of your unique situation, expectations and plans for the future.
As such, what I would prefer to do when it comes to budget planning, is to calculate backwards by first deriving the amount of monthly cash savings that is necessary for things that are non-negotiable such as property & marriage as well as things that are required in the short term that is less than 5 years.
Once we have set aside sufficient savings for those items, we will then plan and allocate our expenses accordingly to the different categories (in order of descending priority) such as
financial obligation
insurance expenses
personal expenses