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11 Budgeting Methods, Which Is Right For You?

Updated: Jan 23


How many times have you tried to budget but failed? Budgeting can be tough, especially if it's something you're not accustomed to.


To be successful, you have to get in the right mindset, set a goal, and choose the right budget that works for you.


Remember, you're in control.


So, instead of your money telling you where to go, budgeting helps you guide and direct your money to where you want it to be, according to Cheng, Marguerita M. "How To Budget."


Person counting their money and deciding how to spend it.
With so many budgets, it can be hard to decide what to do with your many. Let's make life a little bit easier! Which budget fits you best?

You want to budget for at least 3 months to see real results, so to get started and keep a routine, make sure you’re aware of what's out there.


That can be overwhelming since there're so many budgets to choose from. But no worries, you're in the right place.


I'll not only break down each of the 11 methods of budgeting, but I'll also help you figure out which is right for your life.




The "Spending First" Budget / "Pay yourself first"Budget/ "Reverse" Budget/The "Anti Budget" Budget


If you've heard of any of the above-named budgets, there's no need to be confused; they're all the same budget method.


See, things are getting easier already!


With this budget, you prioritize your savings, which will be your first bill, then you pay the rest of your bills.


Once you have taken care of those things, the rest you spend as you, please. If you have control and are more disciplined, this is a good budget for you.


You don’t have to track every penny you’re spending. You put the money toward your financial goals first and foremost.


Example of the pay yourself first budget
A quick example of the Pay Yourself First budget, one of its many names.


The "No Budget" Budget


The “no” budget" budget is a real thing. It's actually a pretty cool concept.


You set up several bank accounts; each used for a different expense.


For example, you'll have a bank account for bills like mortgage, electricity, water, taxes, etc.


Then you'll have another account that you set up for your wants. You can separate your direct deposit into each account or deposit the money yourself.


Make sure you setup direct deposit into your savings account as well. Once you're out of money in that particular account, you're done.


It also works if you don’t want to constantly write down what you need to spend your money on.


Once you set up your accounts and deposits, you're ready to roll, budgeting every month automatically.




The "Envelope Budget"


With the envelope budget, you're separating your funds for each expense, except you're doing it with cash in envelopes.


You have different envelopes for things like your groceries, gas, electric bill, cell phone bill, etc.

This budget is a little outdated for some because most people try not to carry cash. But for people who still do, like my husband, this is a good budget to have.

Once you've depleted all the cash from a particular envelope, you're done with that expense. This is great for expenses you tend to go overboard with.



The "Value-Based Budget"


This value-based budget is based on your values or goals in life. This is a more personalized budget method.


Each person has different goals and values in life, so this budget will look different for each person.


Suppose you're the type that doesn’t spend money on things you don’t need. You’re good.


You have your values about money intact. You're going to do the right thing and don’t need rules.


You don’t see a budget as a chore but as a necessary stepping stone to getting what you want.


But honestly, if you're new to budgeting, this may not be the right budget for you.

I started budgeting because I needed rules and structure.



The "50/30/20 Budget"


In the 50/30/20 budget, you take your income and use 50% of it on your needs, 30% on your wants, and 20% on your savings.


This budget is more of a guideline to use to help you think about budgeting. But some have used it as a budget, and it works.


You first have to take a good, hard look at what you consider needs and wants. Then allocate the funds accordingly because you may have to make adjustments.


But remember, some people use this as a budget, but others use it as a principle for budgeting.


So if you need the structure for now and have to use it as a budget, go right ahead.


Example of the 50/30/20 Budget
Example of the 50/30/20 budget, this is a guideline and can be adjusted if needed, as shown in the example.

The "Zero-Based Budget"


With the “Zero Based Budget,” you're going to add up your income, add up all your expenses and subtract your expenses from your income down to $0.


This works because your savings is also considered an expense. Your total, in the end, will be $0 because you have given every dime an assignment.


It challenges you to look through your expenses and slash things that aren't serving a purpose in your life.

You still get that $0 balance at the end, but you can allocate certain dollar amounts to other expenses if you find you need more money for more important things.


This is an example of the Zero Based Budget.
In the Zero Based Budget, every dollar serves a purpose.
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