5 Budgeting Methods That Might Work Better Than the 50/30/20 Rule

Explore Other Budgeting Methods

Not every budgeting method works for everyone! Choose one that fits your personality and helps you stay consistent. Here are some other approaches to check out:

1. Zero-Based Budgeting – Give Every Dollar a Job

With zero-based budgeting (ZBB), your goal is to allocate every single dollar of your income. At the start of each month, you plan exactly where your money will go—bills, savings, debt repayment, investments, and discretionary spending—until your income minus expenses equals zero.

🔹 Best for: Detail-oriented people who like to track every expense and want full control over their money.
🔹 Potential downside: It requires frequent monitoring and might feel restrictive for those who prefer flexibility.
🔹 Pro tip: Use apps like YNAB (You Need a Budget) or a spreadsheet to help automate and track your allocations.

2. Pay Yourself First Budgeting – Save Before You Spend

This approach flips the traditional mindset of budgeting. Instead of spending first and saving what’s left, you prioritize savings and investments first—before covering any expenses or discretionary purchases.

🔹 Best for: People focused on building wealth, growing savings, and hitting financial goals faster.
🔹 Potential downside: Requires discipline to set savings goals and not dip into them for unnecessary expenses.
🔹 Pro tip: Automate savings to a high-yield savings account or investment account before touching your paycheck.

3. Envelope System – Cash-Based Spending Control

This is a physical, cash-based budgeting method where you divide your money into envelopes for different spending categories (e.g., groceries, dining out, entertainment). Once an envelope is empty, you can’t spend more in that category until the next month.

🔹 Best for: People who struggle with overspending or want a tangible way to stick to their budget.
🔹 Potential downside: Inconvenient for online purchases and requires handling physical cash.
🔹 Pro tip: If you prefer digital payments, you can replicate this method with bank sub-accounts or apps like Goodbudget.

4. The 80/20 Rule – Keep It Simple

The 80/20 budget is straightforward: Save 20% of your income and use the remaining 80% however you need. This method offers flexibility while ensuring you’re building savings.

🔹 Best for: People who want a low-maintenance budgeting system without detailed tracking.
🔹 Potential downside: Lacks strict spending guidelines, which might lead to wasteful spending.
🔹 Pro tip: Increase the savings percentage as your income grows (e.g., 70/30 or 60/40).

5. Values-Based Budgeting – Align Your Spending With What Matters

This approach prioritizes spending in ways that align with your values and life goals. Instead of cutting expenses randomly, you focus on funding what brings you joy and cutting what doesn’t.

🔹 Best for: People who feel restricted by traditional budgeting and want to spend intentionally.
🔹 Potential downside: Requires self-reflection and clear financial priorities.
🔹 Pro tip: Identify your top three financial priorities and build your budget around them.

The key is finding a method that works for you and helps you achieve your financial goals!