It’s the b-word. It might invoke fear. Or procrastination. What about guilt over the previous budgeting attempts? Well fear no more, my friend! With these 15 strategies for budgeting, you’ll surely be able to conquer your money goals!
This guide includes all types of money management, from the popular zero-based budgeting to using cash envelopes, killing your money goals with apps and my favorite – boozy budgeting.
But first, a little backstory:
Budgeting strategies – 15 years in the making
I’ve been budgeting for a long time. I remember in college, sitting with a notebook and pen trying to figure out a budget. I had variable income at the time so I pretty much just wanted to rip up the paper!
That morphed into using an Excel document for a number of years. It was tedious but it helped me to learn the in’s and out’s of tracking my money. Eye opening, really.
That was over a decade ago. I transitioned to using different methods of budgeting, including software and apps. Now I find budgeting simple and it really doesn’t take much effort.
Why am I sharing this? Because friend, as someone who’s been obsessed with personal finance, I’ve tried it all!
Real quick, before we dive in…this post goes over specific budgeting techniques and strategies. If you want to learn more about the basics of budgeting, check these posts out afterwards:
Budgeting 101: 3 Simple Steps to Your First Budget
15 Tips to Stick to a Budget
Effective strategies for budgeting that will help you win with money
Here’s a guide of budgeting strategies that will help you gain control of your finances and tackle those money goals.
Let’s dive in!
1. Zero-based budgeting
Kicking it off with this budgeting strategy because it’s one of the best ways to track your money and get total control over your finances.
With zero-based budgeting, each dollar you earn has a job. So that means at the beginning of the month you’ll sit down to look at your budget. You allocate your income to budget categories like housing, food, debt payoff, entertainment, and so on.
Then you’ll see what surplus is leftover (at the beginning of the month or pay cycle).
Now give your money a job! Do you want those dollars to go to savings? Or more to debt? What about saving up for a vacation or a new vehicle?
Every dollar you earn gets a job in with zero-based budgeting.
This is how I’ve done budgeting for years, and it’s helped me pay off debt, save for a ton of travel, and other things that I value most. It’s truly one of the best budgeting practices you can implement: giving all your money a job!
2. 50-30-20 budget
The 50-30-20 budgeting rule is simple in theory: 50% of your earnings go to your needs, 30% to your wants, and 20% to savings.
So you start off creating a budget by putting your expenses in those buckets. This budgeting strategy helps you to create balance in your finances. That way you’re not overspending on things like shopping or entertainment.
By keeping a 20% savings rate, it will also help save for your future.
Here’s a full guide to the 50-30-20 budget rule, including a free spreadsheet to get you started.
3. Pay yourself first
A very traditional method of budgeting, because it works! Paying yourself first budgeting strategy typically means you save money before you spend.
For example, if you participate in a retirement program through your employer (like a 401k), that’s paying yourself first.
But you can use this strategy further. For instance, you can put money in your emergency fund before you pay your bills. You could allocate money to a vacation savings fund before Spending money on eating out.
The trick with this strategy is to make sure you have the money to actually pay yourself first. You make the room in your budget to pay yourself first.
So you’ll add up all that you want to save for, and all your other expenses. If those 2 things are less than you earn, perfect!
This can be a very effective strategy to meet your personal finance goals, like saving for an emergency fund, a down payment on a house, or another large purchase.
4. Automated budget (a simple budgeting strategy)
Don’t have a lot of time for budgeting? This method will be perfect for you then! The premise behind this budgeting strategy is simple: automate as much as you can.
Here are some examples of what you can automate:
- Deposits from your employer to your bank
- Automatic transfers to your savings account for future goals
- Payments via a debit card for static, reoccurring monthly expenses like rent/mortgage, gas or electricity, internet, childcare, subscriptions, etc.
- Minimum debt payments (although if you have wiggle room in your budget I’d encourage a secondary payment to pay off debt faster)
After you automate as much as you can, then use a budgeting app to categorize your transactions instead of having to manually do it.
For the best suggestions on apps, refer to this Budgeting 101 guide.
5. Envelope budgeting system
How do you feel about ditching the plastic and going full out with cash? Well this method helps you do just that! It’s literally the opposite strategy of #4 above.
According to Forbes, people spend less money using cash versus a credit card. so if you’re looking to spend less on your budgeting journey, this is a great way to do it.
Basically, each time you get paid, you take the money out of your bank – in cash – and put it in an envelope. So if you expect you’ll need $200 in groceries before the next payday, you put $200 in that envelope.
Then when you’re at the grocery store, you pay in cash. That means you’ll have to watch what you spend to not go over the total, too. This method really tends to get people to pay attention to exactly what they spend money on.
Note: this can be a little more time consuming. For instance, when I used the cash envelope method, I’d go into the gas station to pay for gas up front, then fill up at the pump to that exact amount.
However, you may be using less time to categorize transactions in your app or budgeting software, so the time may even itself out.
6. FIRE movement budgeting
FIRE movement is a popular personal finance approach that stands for Financial Independence Retire Early. It’s basically the simple principal that if you save enough money, you’ll retire early.
We’re talking like 30-50% of your income is saved and invested. That’s a big chunk of money for most of us!
The king of the FIRE movement is Mr. Money Mustache. You can check out his blog on how he worked and retired in just 10 years.
The FIRE movement, as it applies to budgeting strategies, works like this:
- Live on 30% – 50% of your income
- Become super frugal in order to live on less
- Live below your means, so the other 50% – 70% goes towards expenses
I won’t touch the income or how much you should be investing to make this work. If you’re interested in your numbers, let’s set up a financial coaching session.
Basically, the more you invest, the faster you can retire!
7. 30 days out budget
One of my favorite budgeting tools is the budgeting software You Need a Budget (or YNAB). I’ve used it many years and I love how it’s helped me manage money over time.
One of the things YNAB tracks is your age of money. It basically encourages you to be able to pay all your bills on the first of the month, using last month’s income.
So the 30 days out budget does just that – pays your next months’ bills with this months’ income.
Okay, so you might be asking how to do that. Like you need this month’s money for this month’s bills.
Yes, it is a challenge. However, if you can save some here and there and save it until the next month, you’ll slowly get enough in your checking account to pay for next month’s bills.
The key to getting on track with this is to scrimp and save between paydays, for a few months (or as long as it takes) until you build up enough in your checking account to pay all of next month’s expenses.
The goal here is to get a month ahead, so that you’re not literally living paycheck to paycheck.
And let me tell you from personal experience…it’s nice to have the breathing room in your finances. 🙂
More of the best strategies for budgeting
Let’s take a sec to soak this all in. What a huge list of ways to manage your money! Deep breath in.
And back out. Whew!
Let’s talk about a fun one, next…
8. Boozy budget (my favorite of these strategies for budgeting)
Okay, I gotta say this is probably my favorite budgeting strategy on this list!
It’s actually rather simple, and can be applied in many different ways. The philosophy is this:
Get in a good mood when you sit down to go over finances. So whether that means having a cocktail, a dance-off in your kitchen or family game night, just do something that keeps things light-hearted before taking a look at your money.
My personal favorite (and I’m sure my husband would agree) is enjoying a cocktail before and during our weekly finance conversations.
In terms of what you actually do during the finance part, you’ll need to refer to the other strategies on this list! 🙂
9. Penny tracker
Alright so this is another totally made up name but it basically means that you intend to, and actually track, every penny. What you make, invest and spend.
This means you have a good handle on:
- How much you earn (income, investments, dividends, etc)
- You know how much you spend monthly…down to the penny
- Your net worth
- Financial goals – short and long term
Do you really need to track everything to the penny to be successful with money? Nope! See #11 below for that.
BUT tracking every single penny keeps you accountable, so that you don’t simply forget what you spend or where your money goes. It’s a basic rule of thumb for budgeting best practices.
Fun fact: my husband and I have tracked nearly every penny for over 15 years. It’s been a huge key in our financial success!
10. Value based budgeting
This budgeting strategy is as simple as it sounds: you budget – and spend – according to your values.
So do you value a nice home to create life-long memories? Do you love driving nice cars and trading in every 2-3 years? What about taking an abundance of vacations?
Whatever your biggest and most prominent values are, spend accordingly.
This translates to your budget by making sure that you make room in your budget for what’s most important. So if things are tight, maybe you cut way back on eating out, and instead use those dollars towards a vacation fund.
Or maybe it’s shopping for clothing and home decor less, in order to send your kids to private school.
Create the category in your budget, give some of your hard-earned dollars that job of taking care of those things you value most. And cut back in areas that don’t make you genuinely happy!
11. Broad budget
Keeping a broad budget simply means to use fewer, larger categories. You do this by creating your budget with less rows or categories, but you consolidate expenses within those rows.
So let’s take housing, for example. You might create just a ‘living’ expense and include mortgage/rent, utilities, internet, home repairs, etc.
Or using an example of food, you could combine groceries with eating out and paying for your child’s lunches.
The broad budget strategy is great if you want to simplify your budgeting process, and keep it really high-level.
Quick note: I’d really only recommend this for people who have a good handle on their finances. In other words, if you know exactly how much money you have coming in, how much you typically spend, and you have the self control to not overspend.
Related read: How to Stop Impulse Spending
12. App-happy budgeting (smooth and simple types of budgeting)
Okay so we’ve already talked briefly about budgeting apps (get the rundown again here). So this budgeting strategy is about alternative apps that you can layer onto your finances to create more automations and hit more goals.
The Acorns app works similarly, but instead of simple savings it’s investing that money. It mindlessly transfers money from your checking account and invests to grow your investment account.
So using additional apps is one way to help you meet your financial goals. Just make sure that in your budgeting app, you track all the transfers accordingly!
Side note: I would recommend just starting with one savings or investing app until you see how it affects your budget!
13. Old school budgeting
If all the app talk isn’t sitting right with you, let’s throw it back to 2 old-school types of budgeting.
First is pen and paper. I’ve done it, and it’s effective. Draw 2 columns: one for income, one for expenses. Write down your expectations, then keep tally of each column and at the end of the month, your paper should match what’s in your bank account.
Simple, right? The most difficult part of this is getting and keeping receipts, and additng it all up!
Second old-school method is using an Excel document. I’ve also used this method. Same thing goes here – create a column for income and one for expenses. As you spend and earn, enter them into the spreadsheet.
This is a little easier to create categories… just add rows under a ‘food’ category or ‘shopping’ category, to see how much you’ve spend in various areas of your budget.
Both old school methods are manual, but they’re very effective if you stay on top of it!
14. Sinking funds
I’ll admit, this term can get confusing. A sinking fund is essentially putting money aside for something you know you’ll need.
Separate than an emergency fund – which is used for emergencies – a sinking fund is for something that you know will happen. So you save up for these items, little by little.
Examples of sinking funds:
- Holiday gifts
- A wedding that you’re expecting to be a part of (and have expenses!)
- Your washer and dryer are over a decade old and you’re expecting them to crap out anytime
- A new vehicle (that you buy with cash instead of a loan)
Tying a sinking fund in with your budgeting strategy greatly enhances your financial success. I’ve personally used sinking funds for years, and have seen it work with my coaching clients too.
P.S. Financial coaching is a way to level up your budgeting game. Here’s more info!
Quick note: I think the term sinking fund is technically related to paying down bonds, as in decreasing the level of debt until it’s paid off. But that’s not really the modern day context.
15. Minimalist budgeting
This is one of my favorite strategies for budgeting, and one I use today. Minimalist budgeting is simply living a more minimalist lifestyle and keeping your money simple.
This might mean that you use less categories via the broad budget (#11) and tie in app-happy budgeting (#12) to intentionally keep your budgeting time limited. So you’re not worrying about the 112 budgeting categories that you could have set up!
Minimalist budgeting means that you live according to your needs and the things that bring you joy, and forget the rest.
It means living with – and requiring – less. So less stuff to buy, meaning fewer expenses.
Minimalism can apply to many areas of your life – finances included!
Budgeting strategies – which is best for you?
While I’ve tried almost all – or a variation of – the budgeting strategies above, the best advice I can give is to keep trying until you find what works for you. Because you will find something that works!
Let’s review them…and some of their totally fun, made-up names!
Budgeting strategies to try:
- Zero-based budgeting
- 50-30-20 budget
- Pay yourself first
- Automated budget
- Envelope budgeting system
- FIRE movement budgeting
- 30 days out budget
- Boozy budget
- Penny tracker
- Value based budgeting
- Broad budget
- App-happy budgeting
- Old school budgeting
- Sinking funds
- Minimalist budgeting
So, I gotta know, which do you think you’ll go for?
Related content you might like:
16 Creative Ideas to Save Money Every Month
10 Reasons You Need an Emergency Fund
55 Easy Ways to Save Money
100 Practical and Interesting Things to Save Up for
7 Money Habits to Make (or Break)
Find this article helpful? Save it for later or share it on social media!