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

May 23, 2019 | Budgeting | 0 comments

Updated On July 27, 2020

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Here’s the deal:

You 1000% need a budgeting method that works (for YOU!) if you want to stop living paycheck to paycheck, never stress about money again, and be able to afford your dream life.

This is important, though — a budgeting method that works for me, might not work for you.


These are the 5 best budgeting methods to stop living paycheck to paycheck and afford your dream life.  Click now to explore different budgeting methods and choose the best one for you!

I’ve rounded up the five best budgeting methods for you to learn about, test out, and use for your finances so you can afford your best life.

It’s true:

Since starting to budget (using an automated budgeting method), I always have enough money to pay for my bills and necessities, I’ve paid off over $6,000 in debt, and have saved more money than I ever thought possible.


If that sounds like something you want for your finances (obvs, I mean why wouldn’t you want that?!), keep reading to discover the best budgeting method for you!

What Are The 5 Best Budgeting Methods?

Throughout this post, we’ll be going over each budgeting method in detail, explaining how to get started, how to set up your budget, and more.

The 5 budgeting methods that we’ll be covering are:

1.  Budget By Paycheck

2.  Automated Budgeting

3.  50/30/20 Budgeting Method

4.  Cash Envelope System

5.  Zero Based Budgeting Method

For more in-depth explanations of any of the budgeting methods listed, simply click on their link to be brought to their ultimate guide!

5-Day Budget Boss eCourse

Sign up below to learn how to take your budget from failing to thriving in 5 quick days.  Included you’ll receive checklists and templates for all 5 budgeting methods mentioned in this post!

1.  The Budget-By-Paycheck Method

Budgeting by paycheck is a great budgeting method to get started with because it is super simple and super 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’ll need:

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

2.  Your bill due dates & amounts

3.  A calendar (download your budget-by-paycheck calendar here)

Then, once you’ve gathered your resources, you can plan out your budget by paycheck!

Simply follow these steps:

1.  Mark on your calendar each time you will be paid and for how much money

2.  Record each time you have a bill due and for how much money on your calendar

Pro Tip:  Use different colored pens for each week!

It should look like this:

After you’ve filled out your budget-by-paycheck calendar, you can:

  • easily calculate each pay cycles 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)
  • and how much money you’ll have leftover each week for debt repayment, savings, or fun

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

(If you prefer a mobile option for your budget-by-paycheck, I highly recommend checking out

The best part about using a budget-by paycheck-method is that:

Living paycheck to paycheck isn’t a big deal anymore and you’ll always be able to easily visualize your financial wellbeing (making affording your dream like a freakin’ breeze!)

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.

Read next to learn how!

2.  The Automated Budgeting Method

An automated budgeting method is my current budgeting obsession.

I’ll tell you why:

When you automate your budget, you can kinda, well, stop budgeting.

I know, I know — that’s a weird thing to say in the middle of a budgeting blog post, but hear me out.

You see, an automated budget will:

  • ensure you always have the exact amount of money in your account for bills (which will be automatically withdrawn on their due date)
  • allow you to automatically save money and pay down debt
  • free up money for personal spending

I told ya.  The best budget EVER.

To get started, follow these steps:

1.  Calculate your total monthly income (after taxes)

2.  Add up your total monthly fixed expenses

3.  Add up your total monthly variable expenses

4.  Calculate how much extra money you have each month

Like this:

(Financial Evaluation templates available in the 2020 Budget Boss Binder)


You’ll need to organize multiple bank accounts (open more if you don’t have enough already).

For an automated budgeting method, I suggest having a bank account for each of these categories:

  • Fixed Expenses (recurring bills)
  • Variable Expenses (such as food, gas, etc.)
  • Savings
  • Debt Repayment (if applicable)
  • Personal Spending for each family member (if applicable)

I know what you’re thinking:

“Why the f*ck do I need so many bank accounts?!”

Hang in there, you’ll understand the method to my madness in a sec — and thank me later ;)

You can finish automating your budget by doing some simple math and setting up your direct deposit/automatic bill pay.

Let’s do it:

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 FIXED EXPENSES.

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

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, debt repayment account, and personal spending account(s).


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.

And you’re done!!!

When you finish setting up an automatic budget, you’ll always have enough money to afford your lifestyle!

Oh, and, you’ll like, never have to budget again until your income or expenses change.

Pro Tip:  Sign up by clicking here for our free resource library to gain access to all our budgeting method templates!

3.  The 50/30/20 Budgeting Method

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

The categories included in a 50/30/20 budget are:

  • 50% for your needs (essential expenses)
  • 30% for your wants (personal spending)
  • 20% for saving (or debt repayment)

Here’s the deal about this budgeting method:

If you are living paycheck to paycheck, a 50/30/20 budget probably won’t work for you because it is just waaayyy too restrictive.

But, if you have plenty of cash flowing in (fist pump), and want to start spending it more responsibly, this budget is perfect for you.

To create a 50/30/20 budget follow these steps:

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

Then, simply budget your income according to your calculations!

For example:

If you earn $5,000/month, you should spend $2,500 on your needs, $1,500 on your wants, and put $1,000 into a savings account or towards your debt repayment.

If you find that you don’t need 50% of your income for your needs, you can always create percentages that align better with your finances.  

Or, if you find that you’re spending more than 50% of your income on your needs decrease your expenses with these helpful tips.


Related Reading:

4.  The Cash Envelope System

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

I mean, this budgeting method is all the rage these days.

This is how a cash envelope system works:

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

Easy peasy!

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Here’s the dealio:

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

And then when it’s gone, it’s gone since you can’t easily transfer money from your savings account to keep spending.

To start using the cash envelope system, simply withdraw money from each paycheck and divide among your envelopes for bills, groceries, gas, and personal spending.

For instance:

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.

Now, this is the most important part:

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

So to make sure you’re sticking to your cash budget, start tracking your spending in a budget binder.

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.

So who is this budgeting method good 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.

With a zero-based budget, there is no room for poor spending habits because you’ll make sure that all your hard-earned cash is being used efficiently.

To set up a zero-based budget, read our ultimate guide, and download our checklist and template by signing up for our free resource library!

How To Track Your Budget (So It Doesn’t Fail!)

Here’s the real deal:

If you do not track your budget, you will not stick to it, and then it will fail and you’ll be sad and worried about money again.

I know this to be the truth because this was me (and probably you at some point, too).

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

Uh, nobody!

So, to help you track your budget, I created an ultimate budget binder that contains every template you’d ever need to create and track your budget for success.

You’re welcome! ;)

Who Says What’s 40+ page printable and digital budget binder is designed to help you track your spending, your bill pay, your debt repayment goals, and your savings goals.  Included you’ll find budgeting templates for every budgeting method outlined in this post, daily spending logs, bill pay checklists, and more.  And the best part?  The Budget Boss Binder is un-dated so you can use it forever!

Yep, for just $9, you can organize and track your budget for the rest of your life.  I mean, how can you beat that?!

To explore every page included, click here!

— It’s Time To Take Action Towards Your Dream Life:

Hey!  Congrats!

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 step two — Creating, implementing, and sticking to your budget!

Here are the action steps you should follow to get started:

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

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

3.  Invest in the Budget Boss Binder to make sure you’re sticking to your budget each month

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

Finally, if you’d like a step-by-step guide to setting up your first budget, sign up for our free Budget Boss eCourse below!

5-Day Budget Boss eCourse

Sign up below to learn how to take your budget from failing to thriving in 5 quick days.  Included you’ll receive checklists and templates for all 5 budgeting methods mentioned in this post!

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– Michelle

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