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Top 4 budgeting methods to try
March 25, 2020

By Jewelle Saunders

Money management looks different for every person. Your income may fluctuate, your expenses may differ from month to month, and your goals may change rapidly depending on a number of factors. No one budgeting method fits all, but it is important to try to find a method that works for you. Equip yourself with the understanding of various methods and try what works best for your lifestyle. Here are a few of the most popular and effective methods to help you get started.

Traditional budgeting

Individuals who are very detail-oriented may enjoy traditional budgeting. Traditional budgeting requires you to track and record your previous year’s income and expenses, and current expenses, and set savings goals based on your disposable income for the future. It is a very structured method and can be time-consuming to start, but it may prove helpful in planning for your larger personal and professional goals.

Proportional budgeting

To execute a proportional budgeting method, you must divide your income into separate areas, such as needs, wants, and savings. This method helps you to allocate your income more realistically and allows you to be more flexible in how you divide your expenses. Some common divisions are 50/20/30 and 80/20, but you can divide how best works for you personally.

50/20/30 budgeting is one of the most popular methods of budgeting. Under this portion assignment, 50% of your income is on your needs, such as housing, food, child care, and transportation; 20% of your income is on your savings or paying off your existing debt; and 30% is spent on your wants, such as traveling, monthly subscriptions, and dining out.

80/20 budgeting is a great proportional budgeting method if you do not necessarily want to track your expenses. Twenty percent of your income is put into savings, and the remaining 80% is spent however you see fit — on your housing, your transportation, going out to dinner, etc.

Zero-based budgeting

A zero-based budget requires you to find a specific purpose for all of your income, often described as “giving every dollar a job.” The goal of this budget is simple: Your income minus your expenses will equal zero at the end of the month. This method works particularly well if you count on the same routine sources of income every month, but if your income fluctuates, this may prove more difficult to regulate. This method can be time-consuming and involve a lot of tracking and planning, but it is overall a very organized method to get your money in control.

Value-based budgeting

Value-based budgeting requires you to track your expenses by first organizing a list of the top things you value most in life. Based on this list, your disposable income is allocated to reflect those values and their priorities. Traveling may be important to you and your lifestyle, so make adjustments on tracking your expenses around that value and plan the rest of your disposable income from there.


With the knowledge of all of these different methods, know that how you manage your money and focus your budgeting is up to you. You can customize any of these plans to work best for you to meet your financial goals. No matter which method you choose, you should be proud of starting to take control of your finances today.

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