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| Tiny Budgeting is a free money management strategy for freelancers and contract workers. It works! |
I'll explain how Tiny Budgeting works in my own words but the Wizard of Cash site has a fine article about it. This is where I learned about Tiny Budgeting.
My wife and I took control of our finances several years ago. We're doing okay. We're not rich but we're comfortable. But the reason I wish I had known about Tiny Budgeting years ago is that we went through some hard times. I think this would have helped. There was a point where I was borrowing money from everyone. It was awful.
Tiny Budgeting is ideal for people with irregular incomes. If you get by on freelance or contract work and you don't earn a regular paycheck, this system can help you manage your money better.
The most important step is to set up a savings account. That savings account accumulates money when it comes in from any source. You pay yourself out of savings once or twice a month. You don't worry about how much is left over as long as you leave a little bit more each month.
It starts out slow at first. You should be in a much better position after 6 months or a year of using Tiny Budgeting because you'll have built up your savings account balance.
You could try this with just a checking account but I don't recommend it.
Your Tiny Budget Savings Account Is Like a Dam. If you know anything about why dams are built then you know they are used for flood control as much as to generate electricity. A dam regulates the flow of water down a river. It ensures the river valley has enough water, that nearby communities have electricity, and that people are safe from floods.
I'll admit there are some environmental concerns about dams but I'm just using this idea for comparison. Your savings account ensures you always have money to spend on your necessary bills when you need it. It regulates your cash flow like a dam regulates water flowing through the river.
Tiny Budgeting Helps You Get Out of the Penalty Trap. That's what I call it. When your bank is constantly charging you fees for covering or bouncing checks and automatic debits you pay a lot of extra fees. You also pay extra fees on your bills when you miss payments.
The idea behind Tiny Budgeting is to gradually gain control over those unplanned expenses. Of course the sooner you stop paying late fees and NSF charges the better. But you have to do this one step at a time.
Tiny Budgeting Is Not a Miracle Cure for Poverty
If a rich uncle dies and leaves you a fortune, that's a cure for poverty. Tiny Budgeting is a tool for personal finance. You still have to win the war against poverty yourself. But using Tiny Budgeting gives you an advantage over your bank and bill collectors. You control when you spend your money, not them.
We learned the hard way not to agree to automatic debits to our checking account. Now when we set up new accounts we refuse the automatic debits. They'll have to accept payment on our terms. Tiny Budgeting is a great way for people to manage bill payments without direct debits. You'll plan when you pay your bills in advance.
The sooner you stop paying extra fees, interest on emergency loans, and spending all your money the sooner you'll start to feel like you have control over your life. I recommend you try Tiny Budgeting.
There Is No Catch to Tiny Budgeting
You don't have to buy anything. There's no book. There's no "course". You don't sign up for anything. Just read about Tiny Budgeting, learn how to do it, and go.
This is the best personal finance system I have ever come across. I can't say enough good things about it. That is why I wish I had known about it years ago. It would have saved my wife and me some stress.
