Budgeting Methods for Beginners

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Hi, I'm Michela!

I saved my first $100K before I turned 25 (& before I ever made 6 figures in a year).

As Charlie Munger  – billionaire investor, businessman, and real estate mogul – says: “The first $100K is a bitch.” But don’t worry, it get’s easier. 

Saving my first $100K by 25 required a lot of sacrifice. I basically spent the first few years of my 20s in a tunnel; I said no to plans, I suffered through some challenging living situations, and ultimately the fuel the pushed me over the edge was a pandemic that halted my spending for a few months.

It was a combination of strategy (budgeting and investing), privilege (I was able to live at home for a few months after college), and a little bit of luck (if that’s what we want to call a stay-at-home order?)

Saving $100K requires more than following a budget – you need to understand how to spend, make sure you’re consistently investing, and have some type of money management system or routine. 

But budgeting is the first step, and you need to get this right in order to scale your savings strategy to hit 6 figures. 

Today, I am going to focus on budgeting strategies you can implement right away to reach that first $100K. 

Let’s get into it!


What it is: A zero-based budget is when every dollar you earn minus every dollar you spend or save equals zero. (income – expenses – savings = zero)

Why it works: This method gives every dollar a purpose. In order to reach zero, you need to actually allocate the money you earn towards either an expense or a financial goal. As a result – you have to prioritize your goals and are no longer treating savings as “whatever is left over.”


What it is: This strategy divides your budget into 3 main buckets: your essentials, your financial goals, and your non-essentials – in that order. You can take it a step further by aiming for a 50/30/20 allocation – 50% of your income towards essentials, 30% towards goals, and 20% to non-essentials. 

Why it works: If you struggle with allocating your income within your budget, this method provides a simple framework to follow. You can keep it high-level and set monthly allocations for the three buckets, or you can dive deeper and track categories within each bucket. 


What it is: This is my signature budgeting method – it combines a zero-based budget with a three-bucket budget to optimize how you both spend and save your hard-earned income. 

Why it works: This strategy gives you a detailed & comprehensive view of how you are using your money from every angle. Every dollar is given a purpose, your spending and goals are prioritized, and if you have additional or unallocated income, you know exactly how much and what your options are for how to use it. This is the method I followed to save my first $100K and beyond. 


First – make sure you have the right tool in place. I recommend The Personal Finance Dashboard, my signature planning tool (pictured above). 

Next, you’ll want to list out all of your expenses and group them as either Essential or Non-Essential. Essentials are those expenses you NEED in order to exist. Everything else falls into the Non-Essential bucket. 

Once you’ve listed out your expenses, it’s time to set some financial goals. I review how you can set these the right way on my podcast, so >CLICK HERE< to listen to that episode for some guidance!

From there – run some math. If you add up your expenses and goals, then subtract them from your income – are you at zero? If so, you’re good to go! If not, then you need to decide how to adjust your budget to get there. 

Building your first budget requires a lot of trail and error. It will take time to figure out what works for you!

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