A Primer on Each Different Budgeting Strategy

What's the one thing that is missing from my plethora of budgeting posts? The very step that needs to come first: figuring out which budgeting strategy is for you. So in my effort to follow up more on the things I've been writing about, here are my tips on how to figure out which budget strategy is going to work best for you. 

My favorite – 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.

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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.”


What's one thing missing from most budgeting posts? The very step that needs to come first: picking the best budgeting strategy for you.

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  • Emily @ evolvingPF
    August 13, 2014 at 1:23 pm

    I think we sort of meld the first three (not the last because we abhor cash!). The balanced money formula (50/30/20) is useful IMO when setting up your life like where you will live and how much you will save. We don’t quite do a full zero-based budget because there are always expenses you can’t anticipate, but almost all of our money is allocated with a bit left over each month that will be put into short-term savings if it is not spent. We do have a lot income and are trying to save aggressively (for us! it’s 18%) so it’s important to sort of project our spending and make sure we don’t create a shortfall, which is why it ends up getting pretty detailed.

    We will probably transition more to a one number type budget after I lose my income next month because spending will have to be very tight and we might end up a bit in the black or a bit in the red each month no matter how much we plan.

    • Lauren Bowling
      August 19, 2014 at 10:23 am

      Zero-based budget was extremely hard and made me head hurt when I attempted to do it, specifically because of the circumstances you describe. I track my money in categories because I like to see an average of what I’m spending in each “bucket” on a month or yearly basis, but for the most part I do the “pay yourself first” and everything else is gravy approach.

  • Travis @enemyofdebt.com
    August 12, 2014 at 10:41 pm

    our budget is a combination of bits and pieces of all of these…but the most important aspect of our budget system is communication – we HAVE to talk about our money and make sure we’re on the same page. Otherwise, no budget method will work.

    • Lauren Bowling
      August 19, 2014 at 10:22 am

      Perfect advice for couples doing a budget. I remember reading on your blog once that you guys sit down at the start of each month and make a money plan for every event/circumstance that you know will be coming up in that month. I think that’s so fantastic. Thanks for sharing some of your wisdom on my blog. 🙂

  • Lindsey P.
    August 11, 2014 at 3:58 pm

    I use the one number budgeting method as well! I find it to be so effective and I rarely run out of money before the month is over. And whenever I have cash leftover that I don’t spend, I’ll throw that extra amount at my debt as an additional payment.
    When I first started cutting expenses and nailing down a monthly budget, I found the cash budgeting system was great for forcing me to cut back on what I spent daily on things like coffee, eating out, etc. It made me realize how much money I was flushing on non-essential things and helped me build will power and focus on my priorities.

    • Lauren Bowling
      August 12, 2014 at 10:28 am

      I love the one budget number as it helps me save better, but I rarely have money left over after hitting all my goals and spending. Good for you! As I mentioned above, I may need to take on a cash budget in the month of September to help me turbocharge my financial goals for the end of the year.

  • Nichelle @ How To Save Money
    August 11, 2014 at 9:32 am

    I am doing the one number budget strategy. It goes well with me since I really want to save more. But there are also times when I use a 50-30-20 strategy. Either way, the most important thing is that we get to save with every income we have.

    • Lauren Bowling
      August 12, 2014 at 10:25 am

      Absolutely. I couldn’t agree more.

  • Melanie @ My Alternate Life
    August 11, 2014 at 1:28 am

    I did the cash only budget this past month and my spending went down 30%! It worked for me. My budget is all out of whack, as I put over 50% of my income to debt.

    • Lauren Bowling
      August 12, 2014 at 10:24 am

      The all cash budget is very powerful. I may need to try it soon!

  • Michelle
    August 10, 2014 at 9:27 pm

    I budget but it’s a pretty straightforward process. The problem has been that the debt takes a lot of my discretionary money off the table. I’m almost at the point where the majority of my debts will be paid off so now some adjustments need to be made. I have been thinking about following the cash only budget for a couple of months and might take the plunge soon.

    • Lauren Bowling
      August 12, 2014 at 10:24 am

      Ah, I bet you are going to feel so rich once all of your debt gets paid off! Congrats!

  • Cat@BudgetBlonde
    August 10, 2014 at 9:26 pm

    I’ve tried so many different types of budgeting —- right now I’m in the split up into a bunch of categories method and try not to go over. 🙂

    • Lauren Bowling
      August 12, 2014 at 10:23 am

      That requires a lot of discipline! I’m glad it is working for you, budget ninja 🙂