Deciphering Which Budget Method Fits Your Lifestyle Best

You may already know that it’s critically important for your financial health to have a detailed budget, but did you know there are different approaches you could try? If your current approach just doesn’t seem to suit you, switching to a different way of budgeting could help you get motivated to manage your money. Although there are many options, a few stand out as straightforward and effective. Here’s how to decipher which of those methods might fit your lifestyle best. 

Use a Bare-Bones Budget If Money’s Tight 

If you’re searching for a new budgeting style because money has been tight and you need to crack down on frivolous expenses, you may want to opt for a bare-bones budget. This classic budgeting style allows you to go on a financial diet while staying organized. In this option, you: 

• Only pay for bills that are essential to your everyday life 

• Cut out any unnecessary or luxury expenses 

• Direct any money left over into your savings accounts immediately 

Try the 50/30/20 Method for Clear-Cut Boundaries 

Perhaps one of the most straightforward budgeting methods is the 50/30/20 method, which lays out clear guidelines for how much to spend and where. If you prefer clear-cut boundaries, this option could work well for you. This budget allows you to spend 50% of your income on necessities, 30% of it on items you want and 20% in savings or investments. If you're someone who tends to struggle with saving enough or overspending on your entertainment and personal care budget, this method could help you stay within clear-cut limits while allowing a great degree of freedom. 

Try the 60/40 Method for Flexibility 

If you prioritize financial flexibility above other factors, why not work a little wiggle room directly into your budget? If you like having plenty of options and budgetary freedom, you could try the 60%/40% method. In this method, you: 

• Allocate up to 60% of your income towards necessary expenses, including rent, groceries, insurance, utilities, and professional fees 

• Allow leeway of at least 40% of your take-home pay each month 

• Commit to saving at least a portion of your leftover income 

• Budget for entertainment and other personal expenses within the leftover 40% 

When choosing which budgeting style fits your lifestyle best, it's important to consider your financial priorities and which method would help you feel the most excited about taking care of your finances. Whether you prefer clear-cut finances, extra flexibility, or strict guidelines to help when money is tight, consider switching to one of these budgeting methods and see if it makes a difference for you.