The 5 Best Budgeting Methods To Help You Afford Your Dream Life

May 23, 2019 | Budgeting, Master Your Money | 0 comments

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Everybody knows that budgeting methods are an essential part of your financial wellbeing.

But you, like most people, might be wondering:

“How the hell do you budget?!”

Here’s the deal:

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Budgeting will be different for everybody and a budgeting method that works for me, might not work for you.

But, there are so many budgeting methods that you’re bound to find one that you love.

> The 5 best budgeting methods:

Once you start budgeting following one of the best budgeting methods, you won’t have to stress about money anymore!

So, if you want to stop living paycheck to paycheck, keep reading to discover the best budgeting methods for your lifestyle.


Budgeting by paycheck is a great budgeting method to get started with because it is simple and straightforward.

With this budgeting method, you’re simply going to create a plan for your money every time you get paid.

To get started, you’re going to need:

1.  Your pay schedule (and average take-home pay)

2.  Your bill due dates + amounts

3.  A calendar

Then, once you’ve gathered your stuff, you can plan out your budget.

Follow these steps:

1.  Write down each time you will be paid and for how much money

2.  Write down each time you have a bill and for how much money

It should look like this:

After you’ve filled out your calendar, you can:

  • easily calculate each paycycles budget
  • visualize how much money you have for food, gas, and other necessities
  • calculate how much money you’ll need from your last paycheck for next weeks bills (if applicable)

This is what your final budget by paycheck calendar should look like:

If you prefer a mobile option to budget by paycheck, I highly recommend checking out calendarbudget.com.

Here’s the best part:

Living paycheck to paycheck wasn’t a big deal once I discovered how to budget by paycheck.

And, I was able to easily see how much spare money I had for savings or debt repayment.

For a more comprehensive guide to budgeting by paycheck (and free printables), check out our ultimate guide!

Read Next…

A budget by paycheck budgeting method is hands down the easiest!

Contrary to what a budget-by-paycheck may sound like, this budget will help you STOP living paycheck to paycheck.  And FAST.


An automated budgeting method is my current budgeting obsession.


Because when you automate your budget, you can kinda, well, stop budgeting.

This sounds counterintuitive but hear me out:

An automated budget will:

  • ensure you always have the right amount of money in your account for bills
  • allow you to automatically save and pay down debt
  • free up money for personal spending

To get started, follow these steps:

1.  Calculate your total monthly income (after taxes)

2.  Calculate your total monthly fixed expenses

3.  Calculate your total monthly variable expenses

4.  Calculate how much extra money you have each month

Next, you’re going to need to open multiple bank accounts.  You’ll need:

  • 1 account for your fixed expenses (bills)
  • 1 account for your variable expenses (food, gas, etc.)
  • 1-3 accounts for savings (if you are saving for multiple things and like the separation)
  • 1 account for debt repayment
  • 1 personal spending account

This seems like a lot of bank accounts, but you’ll understand the method to my madness in a sec.

Now that you’ve outlined your finances and opened [what seems like too many] bank accounts, you can finish automating your budget by doing some simple math.

1.  Divide your total fixed expenses by your total monthly incomeThis is the percentage of your paycheck that should be directly deposited into your bank account for bills.

2.  Divide your total variable expenses by your total monthly incomeThis is the percentage of your paycheck that should be directly deposited into your variable expenses account.

3.  Divide your extra monthly income by your total monthly income – This is how many percents you have left to divvy up among your savings account(s), debt repayment account, and personal spending account.

Stay with me, you’re almost done learning how to never budget again!

The final piece of the puzzle is to set up automatic bill pay so your bills will be automatically withdrawn from your bills account when they are due.

When you’re finished setting up this budget, you’ll always have enough money in all your accounts for your lifestyle and you’ll never, ever miss a due date.

It. is. glorious!

For a more comprehensive breakdown of the Automated Budget System (and free printables), check out our guide!

3. 50/30/20 Budgeting Method

The 50/30/20 budgeting method is another percent based budget system that divides your monthly income into three different categories.

Them being:

  • 50% of your income should be used for your needs (essential expenses)
  • 30% of your income should be used for your wants (personal spending)
  • 20% of your income should be used for saving (or debt repayment)

Here’s the deal:

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The 50/30/20 budgeting method is not for you if you are living paycheck to paycheck – it is too restrictive.

But, if you have plenty of cash and want to start using it more responsibly, it is perfect for you.

To create your budget:

1.  Calculate your monthly income after taxes

2.  Multiply your monthly income by 0.5 to see how much you should be spending on your needs

3.  Multiply your monthly income by 0.3 to see how much you should be spending on your wants

4.  Multiply your monthly income by 0.2 to see how much you should be saving

If you find that you’re overspending in a certain category, cut costs with these helpful tips.

For a more comprehensive guide to the 50/30/20 budget, check out our ultimate guide here (with free printables).

4. The cash envelope system

I don’t doubt that you’ve seen something about the Cash Envelope System on Pinterest.

This budgeting method is all the rage these days.

Here’s how it works:

You break down your budget into categories, as usual.  Then, place cash for each category into a designated envelope and spend accordingly.

Using cash is advantageous because it gives you a visual representation of how much money you have to spend each month after you pay your bills.

To start using the cash envelope system, withdraw money from each paycheck for your envelopes such as for groceries, gas, and personal spending.

For instance:

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If you have a grocery budget of $400 per month and are paid $650 weekly, you will withdraw $100 in cash each week for your grocery envelope.  And so forth.

Here’s the deal, though:

To make this budgeting method work, you must not take money from other envelopes to cover overspending in another budget category.

You can make sure you’re sticking to your budget by tracking your spending in a budget planner like the Budget Boss Binder or online with Honey Money.

For a more comprehensive overview of the Cash Envelope System, check out our ultimate guide!

Read Next…

Could using cash be the answer to all your money problems?

Get the rundown on the cash envelope system of budgeting and find out for yourself!

5. zero-based budgeting method

The zero-based budgeting method is perfect for control freaks (like me!)

The concept of this method is simple:  The sum after subtracting your monthly expenses from your monthly income is zero.

This does not mean, though, that you’ve spent all of your money.

It means this:

All of your money has either been spent OR has been transferred into an account for such things as saving, debt repayment, personal spending, etc.

Who is this budgeting method meant for?

A zero-based budget is kickass for anybody trying to pay down debt or save money quickly because you will be intentional with your money.

There is no room for poor spending habits when you use a zero-based budget, ensuring that all your hard earned cash is being used efficiently.

For a comprehensive guide to zero-based budgeting, check out our ultimate guide!

> tracking your budget

Almost as important as creating a budget is your ability to track your budget.

Because let’s face it:

If you do not track your budget, you will not stick to it.

I know this because this was me.

I mean, who can stick to a budget when they can’t keep track of how much money they’re making or spending?

The truth is, you can’t.

You might be wondering: 

“Well, how do I track my budget?”

Ah, I’m so glad you asked (or wondered!)

These are the best budget tracking resources:

1.  The Budget Boss Binder – $9 ($27 value)

A printable and digital budgeting planner designed to help you track your spending, your bill pay, your debt repayment goals, your savings goals, and more.  The Budget Boss Binder is un-dated so you only have to purchase one to use this planner forever.

To take a peek inside the Budget Boss Binder, click here.



When you act fast, you can download our best-selling Budget Boss Binder for only $9!  But, quick!  This deal ends tonight at midnight!

2.  Honey Money ($50 value)

An online resource to track your budget.  Honey Money is the internet’s version of a printable financial planner.  Within your dashboard, you can create your budget, track your budget, create debt repayment and savings goals, and more.  If you aren’t a pen and paper kinda person, I highly recommend this budget tracking resource.

Get started with Honey Money FOR FREE here.

> Take Action

You’ve completed the first step on your budgeting journey; researching (and hopefully choosing) one of the best budgeting methods for your lifestyle.

Now, it’s time to move onto the hard part:

Actually creating and sticking to your budget.

Here are some action steps to help you get started:

1.  Choose one of these budgeting methods (if you haven’t already)

2.  Find a template for your budgeting method (or create your own) and write down your budget

3.  Invest in a budget tracker like the Budget Boss Binder or the Honey Money app to ensure you’re sticking to your budget

4.  Review your budget tracker in a month and make adjustments (if necessary)

Good luck!

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Happy budgeting,

– michelle

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