11 Budgeting Methods, Which Is right For You?

Updated: Aug 16


Budgeting can be tough, especially if it is something you are not accustomed to doing. You have to get in the right mindset, set a goal, and choose the right budget that works for you.


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

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?

That can be overwhelming since there're so many budgets. But you came to the right place. I will not only break down each of the 7 methods of budgeting, but I will 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 have heard of any of the above named budgets, no need to be confused, they are all the same budget method. See, I told you I would make life easier!


With this budget you prioritize your savings, that 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. You don’t have trouble overspending.


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 is actually a pretty cool concept. You basically set up several bank accounts and each bank account is used for a different expense.


For example, you will have a bank account for your bills like: mortgage, electric, water, taxes, etc. Then you will have another account that you set up for your wants. You can separate your direct deposit into each of the back accounts or deposit the money yourself.


Make sure you direct deposit into your savings account as well. But once you are out of money in that particular account, you are 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, your are ready to roll, budgeting every month automatically.


If you don’t mind keeping up with a bunch of debit cards, lol, you might like this budget. It is almost like the envelope budget, except you are doing things electronically.



The "Envelope Budget"


With the envelope budget, you are separating your funds for each expense, except you are 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 out of date for some people because most people try not to carry cash. But for people who still carry cash, like my husband, this is a good budget to have.

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



The "Value Based Budget"


This 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.


If you are the type of person that doesn’t spend money on things you don’t need. You’re good. You have your values about money in tact. You are 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 are new to budgeting this may not be the right budget for you.

I started budgeting because I needed rules and structures, I was out of control.


This is the right budget for me now, but when I started out budgeting, this would not have worked for me.


The "50/30/20 Budget"


The 50/30/20 budget is when 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 your needs and wants are. Then allocate the funds accordingly because you may have to make adjustments.


Now you might be thinking, well that makes no sense, then it wouldn’t be the 50/30/20 budget, it would be something else.


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 are 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 are not 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 that 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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The "Spending Ceiling Budget"


This budgeting method, if you have ever heard of it, is when you set a cap of how much you are going to spend on your expenses and after that you shout it down.

If you go over this amount, you make the adjustment for the next month by raising your spending ceiling and if you go under you treat yourself to something nice.


So, what do you do with the rest of the money, for example if you make $3500 a month and your spending ceiling is $2000 a month on expenses. You can take the rest of your income and do with it what you please.


You want to take half and put it in savings, go right ahead. You want to take that $1000 and go on a shopping spree, knock yourself out.


But seriously, don’t do that. You get the idea!

The "Survival Budget"


The “Survival Budget” can be implemented throughout all the budgeting methods. This is when you cut all non essential items from your spending.

This budgeting method is meant to be temporary, for example, if you are trying to quickly build an emergency fund or you are trying to save for a house.

But if you like it, you can keep it forever. It’s up to you!



Top 3 Budgets


The 3 most popular budgets are:

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

  • The 50/30/20 Budget

  • Zero Based Budget


Easiest Budget


In my opinion, the easiest budget that I have used out of all the ones I’ve tried is the Zero Based budget. I find it to be simple for my budgeting needs. I do this on paper and I do it about every 3 months, which is quarterly. I also use the "no budget" budget in between the 3 months.


When I first began budgeting, I did it every month. Just something to think about.


How to choose the right budget?


Before you choose a budget, ask yourself these questions. This will help you decide which budget is right for you.

  • What are my goals?

  • Am I a disciplined person?

  • Do I like structure or freedom?

  • How much of my lifestyle am I willing to change?


Important Things To Remember!

Lady happy and smiling because she completed her budget.
People who have a budget tend to think less about money than people that don't budget. They also tend to be less stressed about money.

Key takeaway, choose a budget and stick to it. Not having a budget at all is costing you money.


Your budget is based on the way you think, so your budget will look different from someone else's.


You can switch budgets or even mix budgeting methods. Why not, it’s your life!


Now you may be thinking, “Budgeting will make me think about money all the time, I don’t want to live like that”.


Actually, after talking to several of my friends and neighbors, I literally walked in my neighborhood and asked them, about 10 of them, I then asked 10 of my friends and family members, LOL, they said that when they are putting their budget to use, they think less about money and are less stressed about it.


The 5 out of the 20 people that didn’t use a budget said they didn’t think about money, either, however, at the end of the month they are stressed because they feel they could have done better or spent way more than they anticipated.


They also admitted that they feel like people they know that have budgets seem to have more money than they do.


Everyone said they spend too much money on food!



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