Step 1 of 7
Budgeting methods
This chapter finishes Level 1. Now that you know your numbers, you'll give every peso a plan.
- Goal
- Spend less than you earn, on purpose, and keep your debt under control.
- Milestone
- You've followed a budget for one full month and paid every bill and debt on time.
- Next step
- Set up an automatic transfer to savings on payday, even if it's small.
Your place on the pyramid
- 6
- 5
- 4
- 3
- 2
- 1Managing your cash flow
- Starting point
Many people think budgeting means cutting out everything you enjoy. That's not true. A budget is simply a plan for where your money will go. It helps you spend on what matters to you while still reaching your goals.
When you have a budget, you can
- Spend less than you make
- Pay yourself first
- Enjoy life without feeling guilty
1. The 50-30-20 rule
Beginner-friendly
50% for needs (food, rent, transportation, bills, family support), 30% for wants (shopping, travel, hobbies) and 20% for savings and debt payments. On ₱25,000, that's ₱12,500, ₱7,500 and ₱5,000.
2. Pay yourself first
Savings before spending
Set aside a fixed amount or percentage for savings as soon as you're paid, then budget the rest. You stop saving "only if there's money left."
3. Envelope method
Cash or separate wallets
Set a limit for each category and put the money in separate envelopes or e-wallets. Once an envelope is empty, stop spending in that category until payday.
4. Zero-based budgeting
Every peso has a job
Income − expenses − savings = ₱0. Every peso goes to a purpose, like bills, savings or investments. It gives you full control, but takes more time to track.
5. The 80-20 budget
Simple and flexible
20% to savings and 80% to everything else. Keep it simple and still build savings consistently.
- Do I want something simple or detailed?
- Will I track manually, or do I prefer automation?
- How much structure do I need to succeed?
- What does "enjoying life" mean to me, and how much of my budget should it get?
Your answer saves as you type