Evolving Personal Finance » Entries tagged with "top-down"

When Top-Down and Bottom-Up Budgeting Clash

October 3rd, 2012 | 24 Comments

When Top-Down and Bottom-Up Budgeting Clash

In my observation, there are two totally reasonable approaches to budgeting: top-down: decide where your money should go de novo without reference to your current spending i.e. percentage-based budgeting like the Balanced Money Formula (BMF) bottom-up: observe where your money goes and create a budget reflecting that, perhaps with small tweaks   The bottom-up approach is the most straightforward for most people because, you know, they already have financial lives. They rent or have a mortgage, they eat, they pay … Read entire article »

Filed under: budgeting, transitions