I had spent hours creating my budget categories and amounts in Mint. I added my accounts so all the transactions would be imported. I was eager to conquer this budgeting monster.

The eagerness was short lived.

Not even two weeks later, I found myself staring at the computer screen with tears running down my face. The accounts wouldn’t sync up properly. My transactions were being miscategorized. Transfers were showing as income and completely messing up my budget.

This was not the easy budgeting solution I was hoping for.

How To Budget Your Money

Sometimes budgets don’t go according to plan.

Perhaps you’ve had your own bad experience in the past and you get anxious just by hearing the word budget? Have you felt like slamming the lid shut on your laptop or ripping your papers to shreds when trying to work on your budget?

It might be time to try a different method.

Using a different system may be all you need to eliminate the frustration of budgeting. Some people work better with super simple budgets, others like specific spending plans that define every dollar.

But the key is to keep trying until you find one that works for you. To help with that, today I’ve highlighted 6 different popular budgeting methods.

Note: This post contains affiliate links.

1. The 50/20/30 Budget

Expenses in this budgeting system fall in one of three categories: fixed expenses, financial priorities, and flexible expenses. Starting with your take home pay, your expenses should fall in these budgeted amounts:

50% is for fixed expenses. This includes items like your mortgage/rent, car loans, insurance, and utilities.

20%: is for financial priorities. This includes items such as your debt repayment, savings, and retirement funding.

30% is for flexible expenses. This includes items that vary from month to month like groceries and gas. You’d also include any “fun” type expenses in this category such as dining out and going to the movies.

Pros

It’s an easy way to track your expenses. Instead of worrying about several small categories, your expenses are lumped into three buckets. You have the flexibility to easily spend more on dining out one month (and cut back on groceries). Or splurge on your favorite apple scented products from Bath and Body Works and skip the restaurant meals without worrying about moving funds between the categories.

Cons

It can be hard to classify expenses, especially if you over-analyze. Fixed expenses would typically be your “need” items and your flexible expenses would be your “want” items.

But it isn’t always easy to distinguish those needs vs wants. For example, my budget includes daycare for two kids since my husband and I both work. Do I count this as a necessity even though it’s a lifestyle choice? Regardless of how I categorize it, it is such a hefty expense that it would put any category over.

Summary

The 50/20/30 budget is a good measuring stick. If you track all your expenses and fall roughly in these percentages, you’re doing great with your finances!

Want more on the 50/20/30 budget?

2. Zero-sum budgeting

In a zero-sum budget, you must account for every single dollar. If you complete your budget and find you have $100 left, you need to give that money a job. Will it go to your emergency fund? Will you pay off debt with it? Or splurge on some new clothes?

Whether it’s for priorities or fun stuff, you’ll want to make sure every expenditure is included in your budget.

Pros

You have a plan for every dollar in your budget. And a plan is a great way to stay on track with your finances.  When you don’t have a plan, your money might vanish without a trace.

Cons

When you have every dollar accounted for, it isn’t as easy to make adjustments on the fly. What if you forgot that Fido needed shots when you made your budget? You’ll have to take that money from another category.

Summary

The Zero-Sum Budget is great for those struggling with their budget and need the rigidity of the zero-sum budget. It forces you to make a plan for your money and account for your spending.

Want More On The Zero-Sum Budget?

3. You Need A Budget (YNAB)

The YNAB system is also based on zero-sum budgeting. In addition to giving every dollar a job, the ultimate goal is to get one month ahead of your expenses. Once you get a month ahead, your budget for the current month is based on the income your earned last month.

Pros

When you are a month ahead of your expenses, you always have a cushion in the bank. The paycheck to paycheck cycle is broken and you don’t have to constantly watch what bills you are paying to make sure there’s enough money.

Cons

If you have a really tight budget, it could take a while to get to the one month ahead point. (My ideas for building an emergency fund quickly will help you get ahead faster)

Summary

YNAB is great if you can get a month ahead of your expenses. It can be complicated at first to adjust frequently, but those that use this system swear by it.

Want more on the YNAB system?

4. The Half Payment Method

The half payment method is a great option if you are someone who gets paid bi-weekly. It involves paying half of each of your bills with each paycheck.

For sake of example, let’s say that John Doe…has a $3,000 monthly income. Let’s also say that John has the following fixed expenses:

Mortgage: $680

Car Payment: $300

Auto Insurance: $120

Health Insurance: $250

Life Insurance: $50

Phone Bill: $100


Total Fixed Expenses: $1,500

For this example, John’s fixed expenses are exactly half of his total monthly income. The other half is what John will use on his variable expenses like utilities, groceries, restaurants, gasoline, clothing, gifts, and entertainment.

At first glance, it seems like John would have nothing to worry about with fixed expenses that are only half of his monthly income.

But the problem with monthly bills is that they typically aren’t spread evenly throughout the month. Inevitably, one half of the month will have more due dates for fixed bills than the other.

And that’s where people who are paid bi-weekly can have their budgets blown.

Going back to our sample budget, let’s say that during the first half of the month the only bills that happen to come due are John’s life insurance and phone bill. John writes out a simple budget for himself:

Paycheck: $1,500


Fixed Expenses

Life Insurance:: $50

Phone Bill: $100

Total Fixed Expense: $150


Money Left Over for Variable Expenses: $1,350 (1,500-$150)

Now let’s pretend that John has a fantastic time with that leftover $1,350 and spends every penny of it. That would probably be fun, but he’d be in for a rude awakening with his next paycheck:

Paycheck: $1,500


Fixed Expenses

Mortgage: $680

Car payment: $300

Auto Insurance: $120

Health Insurance: $250

Total Fixed Expenses: $1,350


Money Left Over for Variable Expenses: $150 ($1,500-1,350)

Now let’s add in a $100 utility bill and that leaves John with $50 to buy 2 weeks worth of groceries and gasoline. Restaurants? Well, John decides he just won’t eat out till his next paycheck, so that’s not a problem.

  • Oh, but he forgot he promised to have lunch with Paul on Tuesday! (gonna have to find an excuse to postpone that)
  • And then he gets a text from his sister making sure he doesn’t forget to buy a present for dad’s birthday party coming up on Saturday.
  • And then he gets a flat tire.

Now, I know I’ve exaggerated a bit to have some fun with this, but for many people, this example hits too close to home and is no laughing matter. The truth is it can be hard to have the discipline to keep from spending what looks like leftover money from our paychecks.

The half-payment method can help with this. Instead of having to avoid spending a huge chunk of extra cash in the bank, you go ahead and actually pay half of your monthly bills with each paycheck.

Using the half-payment method, your budget for your first paycheck would look like this:

Paycheck: $1,500


Fixed Expenses

Mortgage: $340 (half of $680)

Car payment: $150 (half of $300)

Auto Insurance: $60 (half of $120)

Health Insurance: $125 (half of $250)

Life Insurance: $25 (half of $50)

Phone Bill: $50 (half of $100)

Total Fixed Expenses: $750


Money Left Over for Variable Expenses: $750 ($1,500-750)

And your budget for Paycheck #2 would look exactly the same. See how this helps to smooth out your spending patterns?

With the exception of your mortgage, you should be able to set up half-payment schedules for all of your bills.

If you wanted to apply this same principle to your mortgage payment, you could set aside half of it in a savings accounts or cash envelope until the time comes to pay the full amount.

Pros

Since your expenses are divided up by paycheck, the rest of your money will be more stable. No more worrying about how you’re going to pay for groceries at the beginning of the month!

Cons

It can be confusing to split your bills and try to track them. I would recommend trying this method with one bill first to see if you like it before moving all of your other bills over to this method.

Summary

The half payment method is a great tool if you are living paycheck to paycheck. You don’t have to have a money cushion to be successful with this system and you’ll have a more stable cash flow to cover expenses.

Want more on the half payment method?

5. The One-Week Budget

This method is a set it and forget it method. You keep your bill money separate from your fun/everyday money and plan out what bills need to be paid with each paycheck. If money is tight, you’ll do this with the half payment method.

Pros

You don’t have to constantly worry about your bills. Bill money is kept separate from your everyday money so it’s easier to see exactly how much money you can freely spend. No more fretting over whether your grocery trip will cause your rent check to bounce.

Cons

This system can be a little confusing at first to map out your bills and which pay checks will cover those bills.

Summary

A great system for those that hate budgeting and want a simpler system. To be successful with this method, you should have a bit of a cushion so you can automate your finances.

Want more on The One Week Budget?

  • The One Week Budget

6. The Cash Envelope System

When you find yourself overspending (whether it’s a particular category or your budget as a whole), the cash budget will get your spending in check quickly. When you go to the grocery store and only have $50 in cash on hand, you’ll pay more attention to what you put in the cart and the total you’re spending.

Pros

You can’t overspend if you use cash and you’ll be forced to stay on budget.

Cons

You may not want to carry around several envelopes of money or even that much cash at one time. You have to plan and remember to bring the appropriate cash envelope with you on your errands.

Summary

Cash budgets are a great tool to limit spending in a particular area. If using cash for all your expenses sounds too cumbersome, you can just use cash for your trouble spots.

Want more on the cash budget system?

What budget system is best for you?

You can create a budget that works for you. Think about whether you like to keep thing simple or need the rigidity of strict budget categories. If you want to rip your current budget to shreds, give one of these techniques a try. You can succeed at budgeting!