Let’s talk budgeting—and not the scary kind where you feel like you’re grounded by your own finances. I’m talking about the kind of budgeting that gives you a sense of control and direction. Honestly, the way I used to handle money was not helping my finances at all. I’d jot things down here and there, pay what I could, and then wonder where all my money went at the end of the month. Sound familiar?
That all changed when I did some research, figured out the different strategies to budget, and chose one that worked for me. Spoiler: there isn’t one perfect method. Everyone has different financial scenarios, goals, and paychecks. But when you find a strategy that clicks, it can make a world of difference. For me, that’s the Budget to Zero method. It has been a game-changer in my financial journey.
Let’s take a look at that and a few others that may fit into your journey. Some strategies may help better depending on your debt repayment, bills, or personal circumstances. So while these may not all apply to you, it’s important to be informed and educated on all of your options. Who knows, maybe you can take inspiration and make it your own.
Budget to Zero: Every Dollar Has a Job
This one’s my go-to. The idea is simple: at the end of the month, your income minus your expenses equals zero. That doesn’t mean you’re spending every dollar—it means every dollar is assigned a job, whether that’s bills, savings, debt, or even a fun fund.
Why it works for me:
- It forces me to be intentional with my money. Every dollar goes somewhere, so there’s no more “I’ll just see what’s left” mentality.
- It’s flexible. If something unexpected comes up, I just reassign dollars from one category to another. No guilt, no stress.
How to try it:
- Write down your monthly income.
- List all your expenses, including savings and debt payments.
- Assign every dollar to a category until you hit zero.
- Track it! Use a simple spreadsheet like this one I have created for FREE!
- Check out my blog, Dollars in Order: Your First Step to Freedom, that talks about setting up two checking accounts to take this one step further!
Pro tip: Budget for fun stuff too. Even a $20 “Treat Yourself” fund can make a difference.
The 50/30/20 Rule: Keep It Simple
If you’re new to budgeting or don’t want to micromanage every dollar, this method might be for you. Here’s how it works:
- 50% of your income goes to needs (rent, groceries, utilities).
- 30% goes to wants (dining out, hobbies, entertainment).
- 20% goes to savings or debt repayment.
Why it’s great: It’s straightforward and doesn’t require a ton of tracking. You can adjust the percentages if needed—like bumping savings to 25% and trimming wants to 25% if you’re tackling a big financial goal.
Pay Yourself First: Savings First, Everything Else Later
This strategy flips the script. Instead of saving whatever’s left at the end of the month, you prioritize saving and investing right away. Once you’ve paid yourself, you use the rest for bills and expenses.
Why it works: It builds the habit of saving and keeps your goals front and center. Plus, it’s great for building an emergency fund or hitting long-term milestones.
Pro tip: Automate your savings so it happens without you even thinking about it.
Reverse Budgeting: Focus on Savings Goals
In reverse budgeting, you start with your savings goal and let the rest of your budget fall into place around it. For example, if your goal is to save $500 this month, you set that aside first and then figure out how to cover your other expenses with what’s left.
Why it’s helpful: It keeps your savings on track and helps curb unnecessary spending.
So, what’s the takeaway? There’s no one-size-fits-all approach. If you’re feeling stuck, try out a few methods and see which one fits your lifestyle and goals. For me, Budget to Zero was the strategy that finally made everything click. It might work for you too, or you might find that the 50/30/20 rule or another approach fits better. Either way, the key is to start. Your budget doesn’t have to be perfect; it just has to work for you.
Got a favorite budgeting method? Let me know in the comments—I’d love to hear what’s working for you!