When getting started with creating a budget, the type of budget you should use will depend on your personality. But what if you are just getting started? Looking toward what astrology can tell us about our money habits may be just the key. (I'm also a huge astrology nerd, so this article was very, very fun for me.)
While money does have a lot to do with numbers, there’s so much more to it than that. Your personality has a big influence on what budgeting technique is best for you because your personality affects how you interact with almost everything in your life.
If you like being hands off with your money, trying to micromanage every cent is going to drive you nuts. But, if you need to feel like you’re more in control, then a more detail-oriented budget is going to work better for you. Knowing how you feel about money before creating a budget will go a long way towards reducing stress when it comes to your finances.
Or, you could just cheat and go by what your astrological sign says is best for your money. 😉
The Hands Off Approach
Best for Geminis, Libra, Sagittarius, Pisces
Budgeting Method to Try: 50-30-20, One Number
The 50 30 20 method was originally created by Senator Elizabeth Warren. The idea is that you divide up the income you receive after tax in the following way.
- 50% to your needs. Things like your home, bills, food, and debt.
- 30% to your wants. Things that make your life better like entertainment, eating out, beauty treatments, and more.
- 20% to savings. You can choose exactly how you want to save your money but put it somewhere.
This is also a great method if you’re new to using a budget. You have a clear idea of how much money you can allocate to each category.
When you first run the numbers, you might find that your current expenses and debt payments take up much more than 50%. That’s okay! Take some time to identify expenses you can eliminate or focus on paying down debt. Here's my full post on the 50-30-20 method.
If you want to get even more hands-off than the 50-30-20 method, then you might like the “one number” method. Pay yourself first, put money towards your bills, and then whatever you have left is what you’re allowed to spend.
This is the simplest way to budget. There’s no need to worry about categories and where each penny is going. However, if you have a hard time disciplining your spending, this method may not work for you.
For the Super-Involved
Best for Virgo, Scorpio, Capricorn, Aquarius
Budgeting Method to Try: One Number
Some people feel stressed out if they don’t know what’s going on with their money. Seeing all the details of where each dollar and cent is going helps them feel better about their financial situation.
If you find yourself in this category, there’s one type of budgeting that could suit you well. It’s called the zero-based budget. Essentially, to make this budget work, your expenses need to match exactly the amount of income you make each month.
Budgeting in this way means you know exactly where each dollar you earn goes. Whether you spend, save, give, or invest what you make, it all needs to be allocated to a specific category.
Best for: Aries, Taurus, Cancer, Leos
Budgeting Method to Try: The Envelope Budgeting Method
Americans tend to spend more than necessary on everyday purchases. In fact, 64% of the country is currently in debt.
Emotional overspending can get you in trouble fast. One of the best ways to quickly regain control over your finances is to switch to only using cash. The envelope system is a great way to set aside money and make sure you have enough to cover your monthly expenses.
Here’s a brief overview of how the system works:
- You have one envelope for each category of the budget you need to allocate money for.
- Whatever amount of money you put into each envelope is the entire budget you have for that category every month.
- Once you empty each envelope, you don’t have anything else to spend.
When you can see how much money you have in your hands, you’re more likely to try and stay within the limits defined by your budget and avoid your spending triggers.
Pro tip: The most important part of this system is that you never take from one envelope to pay for another.
Let me tell you a secret.
There’s no one perfect way to budget.
No matter how hard you look, you won’t find a technique that works for everyone. There’s no magic money pill you can swallow and have your finances automatically get sorted. Knowing your money personality is a great way to figure out the budgeting method that works best for you. Once you’ve identified how you interact with money, you can choose the right system and be on your way. Keep experimenting if one doesn't work out (even if you're a LEO who likes to save!)