If you’re struggling with sticking to a budget, check out these 8 unique ways to help you manage and allocate your money differently!
Budgeting is a good thing – we all know that. But it’s also hard.
If you find yourself unable to consistently stick to your budget, try ditching your current system and start an alternative way of budgeting. The problem might be your budgeting system, and not your execution.
Below is a list of eight different ways to budget. It may take some time to find the method that works for you, but it will be worth it. Knowing where your money is going is the first step into taking control of your finances.
1. Reverse Budget
With this method, you first set up savings goals (like save $1000 each month for retirement, put $200 towards a vacation fund, set aside $50 for a new car) and then the left over money is up for grabs (you can spend it however you like). I like this unique way to budget because you prioritize your future self first. You don’t have to feel guilty about how you spend the rest of your money since you’ve already done the responsible thing of saving first!
2. Cash Only Budget (Envelope System)
If you struggle with overspending each month, or struggle with credit card debt, this is the budget for you. You’ll only deal with cash. Here’s the gist: Create envelopes for each spending category you have – groceries, fuel, utilities, restaurants, clothing, etc. Each month, cash out your paycheck and put the appropriate amount of cash in each envelope. You’ll carry these envelopes to the store with you. If you run out of cash in the envelope, you can’t make the purchase. It’s impossible to overspend since you only use the cash available in the envelope (no credit cards!).
3. Zero Based Budget
This method of budgeting forces you to account for every dollar you make. Your income minus your expenses equals zero, hence the name, Zero Based Budget. Each month you must plan where all of your money goes – included expenses like food, entertainment, retirement savings, insurance, etc. If you make $2,546 this month, you must budget for $2,546. This budget is great for those very motivated to pay off debt or save money.
4. Bucket Budget (also known as the Balance Money Formula 50/30/20)
This method of budgeting divides your money into three buckets: the first bucket is for fixed expenses (50% of your income), the second bucket is for lifestyle expenses (30% of your income), and the third bucket is for future expenses (20% of your income). Fixed expenses include mortgage, rent, debt payments, utilities, etc. Lifestyle expenses include groceries, restaurants, clothing, self care, fun money, etc. Future expenses include retirement savings, vacation funds, saving for a car, etc. This is for someone who wants to lead a more balanced life and needs some guidance on how much they should be spending on various things.
5. The Anti-Budget (also known as the 80/20 Budget)
This way of budgeting is a hybrid of the Bucket Budget and the Reverse Budget. You develop a formula (proportions) of what you want to save and spend – in the 80/20 budget, you set aside a certain amount to save (20%) and spend the rest (80%) on whatever you want. You can change the proportions (80/20 to 70/30 or 60/40) depending upon what your goals are.
6. Bi-monthly or Weekly Budget
This may work for people who get paid bi-monthly or weekly. Each time you get a paycheck, you make a budget to determine where that money goes. One downside of this method is that you can’t get include all your monthly expenses in one budget (for example, your mortgage/rent only gets paid once per month so this won’t appear in each weekly budget, only in one of the weekly budgets each month).
7. Digital Budgeting
Using this method, you create a budget using an online tool or app (like Mint). Then, as you spend on your credit or debit card, the online tool allocates the expense into the correct budget category. When you are nearing the budget limit for a particular category, the tool/app will send you an alert. This method requires minimal effort in budgeting because the tool does it all for you.
8. 10% Buffer Budget
So I made up this name, but I really like this way of budgeting, especially if you are new at budgeting or get frustrated that your budget never seems “right”. With this method, you budget 90% of your income – it should include all of your expenses like mortgage, food, entertainment as well as all of your savings like retirement and vacation funds. You DON’T budget 10% of your income. So, if you overspend in one category, it’s no big deal since you have this extra 10% buffer each month. However, if you end the month on (or under) budget, this 10% can just go towards savings or a treat for yourself. I think this reduces a lot of stress with budgeting.
A FREE Budget Printable for you
The number one way to ensure success in following your budget is to actually write it down. I have used a simple budget printable to record my budget each month. I used it when I was single and in six figures of student loan debt and I used it when I got married and my husband and I were trying to figure out how to spend and save our money as a couple. And guess what?! I’m making it available to you! Simply sign up below to get your free budget printable and start taking control of your money today!
Which budgeting method do you use? How long has it worked for you?