The 50-30-20 Strategy
When I first started budgeting, I was a BIG fan of the 50-30-20 method, I even was quoted in this article for GoBankingRates about my love for the 50-30-20. I thought it was awesome, because for a financial newbie like me who had never really talked to anyone about what is/isn't an appropriate amount of spending in any category, it gave me a rough idea of how much of each paycheck I should be spending. I think for those starting out, or those who have aggressively saved for awhile, 50-30-20 is a fantastic approach to divvying up the budget.
Even now that I am more fiscally responsible, I still shoot to save 20% of my paycheck.
The Best Budgeting Strategy for You: The Top 3
The One Number Budget Strategy
Last month, I revealed my own personal budgeting strategy, which is very similar to the “one number” budget. Learnvest gives a great account (See why we love Learnvest so much here.) of how to do the one number budget, but the gist is that you pay yourself first, subtract what you want to save at the beginning, then subtract your bills, and the amount leftover is what you have left to spend. No more dividing money between categories, and it is a lot more flexible than worrying over every penny.
The one number strategy especially works well if you want to aggressively save. Since I am actively trying to save 40% of my income, the one number budget has started working better for me than my previous approach.
The Zero-Based Budget
For those of you who are a little more hardcore, a zero-based budget might work. Within the zero-based budget framework, every dollar gets assigned, even if it is to a particular savings or debt pay down goal. At the end of each month, your budget should be at $0. Having tried to make this work several times myself, I can ardently say I am not a zero-based budget person, but many other bloggers like it. My good friends Holly and Greg wrote a book about Zero-Sum budgeting, called Zero Down Your Debt, which I highly recommend and you can snag here.
Cash Only Budget
If you have a hard time staying within budget, a “cash only” diet or no spend challenge, might break you of that habit. We've written about the envelope budgeting method before, but this theory banks on the psychological reaction we all have to spending cash. Unless you are me, and cash seems to float out of your pocket faster than you can say, “boo.”
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