5 Different Budgeting Methods to Try

The word budgeting can strike fear into people, but the truth is, a good budgeting plan can really help to put your finances in order. Thankfully, there are many different kinds of budgeting methods you can try.

budgeting methods

There isn’t a one size fits all when it comes to budgets. Depending on your circumstances, your lifestyle, and your personality will depend on which budgeting system works for you.

If you aren’t a fan of paperwork and the thought of budgeting bores you, I get it. But I do think it’s super important and that we should push through for the benefit of our finances.

The good news is, if you are the type of person who can’t stand paperwork, there are budgeting methods that vary in the amount of that kind of stuff that needs to be done.

Budgeting is not a dirt word. 🙂 Because we have learned to stick to a budget, we have been able to save to go on trips for our family, as well as being able to pay down $10,000 of debt in one year last year. So, to me it will always be worth it.

If you need a printable budget template, be sure to join my e-mail list for access to a free budgeting printable.

If you are keeping track of your finances, knowing what is coming in and going out, it will give you peace of mind and you won’t be in a panic when a financial emergency situation comes up. You won’t be looking at your bank account and wonder where the heck the money is going because you are tracking expenses and know where the money is going.

You never want to get to that point where the bills come in the mail and you don’t even open them because you can’t handle the stress that goes with it.

Also, more than likely if you do not have a budget, you aren’t saving much.  Budgeting is the perfect tool to use to make sure you are putting money away to save each month.

And if you have struggled to live within your means, a budget definitely helps with that.  We always have a better chance at succeeding in any of our goals when we have a plan, and when it comes to healthy finances, a budget is that plan.


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Cash envelope system. This is by far the most popular way of budgeting people who want to get out of debt use. The idea is that you have different envelopes for different expenses. For each month you allot a certain amount of money for each category.

When the money in the envelope is gone, it’s gone. You have to wait till the following month to buy anything else you would use the cash in that envelope for.

That means that if you have an entertainment envelope and you use all your money before the month is over, looks like you are staying home until the following month where the envelope gets replenished!

For a cash envelope system there are these great wallets that you can use that are created for this purpose, like this SavvyCents wallet from Amazon that comes in a variety of colors.  You can still be stylish while sticking to a budget. 🙂

You can also just use multiple bank accounts as “envelopes” which is what we have done in the past.  This budgeting method is my personal favorite.

The 50/30/20 budget. With this budget plan you are dividing your budget up. 50% goes to necessities such as groceries, housing, car payments, or things like that. 30% go to wants like shopping and entertainment, and 20% go to a savings account and debt repayment.

With this plan you need to decide what is a want and a need. On this plan many people put things like cable, cell phone plans, makeup, and eating out as a want and not a need.

Zero-based Budget. This method basically makes sure every single dollar is allotted for. What it comes down to is that your income – expenses = 0 dollars. If you have leftover money it means you need to give those dollars somewhere to go. Out of expenses to pay for? There is always savings to assign your extra leftover money to.

The 60% solution. This budget was created by a man named Richard Jenkins. The idea is that you will spend 60% of your income on “committed expenses.” What are committed expenses? Well, they are your needs, such as housing, car payments, groceries and more, but also included in this 60% are expenses such as cable, extra-curricular activities for your kids, or cell phone plans. So, as you can see, it goes beyond basic needs.

The other 40% of your income is divided into 4 categories with 10% allotted for each one. What you use each 10% for will vary from person to person, but some ideas are retirement funds, slush fund (aka, money to just “blow”), savings account for things like a vacation or big ticket item, and/or an emergency fund.

The Backwards budget.  With this system you are paying yourself first, not last.  That money you use to pay yourself first will go into a savings account.  This can work for people who are goal oriented type of people.  Basically, once you’ve decided how much you want to save, you need to use the rest to cover your expenses and you make it happen!

With this plan when you are thinking of how much you want to save each month you generally have a goal in mind and know how many months you need to save X amount of dollars to save the total amount, whether it be for a trip, a vehicle, or a down payment for a home.

I feel like the backwards budget is the least likely budget plan that I would use.  For me personally I feel like I need to have my expenses covered before I think about savings, however, I can see this system working for someone who has a lot of unnecessary expenses and need to cut some.

If you only have so much money after savings to pay for expenses, and your savings comes first, expenses that aren’t a necessity have to go.


So as you can see, there are a variety of different budgeting methods to fit a variety of needs.  Find out which one works best for you.  If you try one of these budgeting methods for a few months and just aren’t seeing the results you want or you find it difficult to stick to, try a different one.

Of course, no matter what budget you try it will require discipline and hard work.  If you do that there is a good chance that no matter what budgeting system you choose, it will work.

If you haven’t budgeted in the past, the truth is it will take some getting used to and it won’t be easy at the beginning.  It will take hard work and a lot of learning how to say no if the money just isn’t there for that specific thing.  But the more you do it the easier it will come to you and over time you will begin to see positive results from all your hard work.

And when we see results it encourages us to keep going.

While there are a variety of ways you can do up a budget, you may be the time who prefers to do everything electronically, and not with a pencil and paper.  If that sounds like you, be sure to to check out Personal Capital.  It’s a free, online program that allows you to keep track of all your finances, even allowing you to connect and sync your various financial institutions.

If you live in Canada, Personal Capital is not available, however you can use the MINT app.  Check it out here.

But, if you are someone who prefers to track your finances with a pen and paper, check out the financial printable pack I have in my printables shop to help you organize your finances, because sometimes we just need a little guidance in the form of a template.

Whichever way you choose doesn’t matter, what matters is you choose the system that works for you and your family.

Do you have a budgeting system you already use?  Have you tried a few different kinds and landed on your favorite?  I’d love to hear  about your budget successes and what you have learned from when it comes to budgeting in the comments below.


5 Budgeting Methods to Try
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5 Budgeting Methods to Try
Budgeting is important. Find a method that works for you. Here are 5 different methods you could try.
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Simple Life of a Frugal Wife

2 thoughts on “5 Different Budgeting Methods to Try”

  1. No encouraging stories from others.Maybe others don’t enjoy budgeting. Great advice.My husband and I would add, pay God first.

    1. Yes, I know with the envelope system, which goes hand-in-hand with Dave Ramsey’s budgeting methods, he would definitely emphasis an envelope being used for tithing and giving. You could definitely add that in to any of the budgeting methods presented here as well.:)

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