The Best Classic Budgets To Test Out

Budgets are the cornerstone of any financial journey but they are not a one size fits all. There are a few suggested methods pushed around out there which are the perfect place to start. Then once you have a better understanding of how your money flows and the best budget for you, you can customise your own budget. The best place to start would be by testing a few of the classic budgets out there to see what you like and what you don’t like.

Here are three classic budgets to try…

50/30/20

50% for needs, 30% for wants and 20% to savings. This is what the 50/30/20 budgeting rule means. These percentages are a great starting point for someone new to budgeting. Plus the concept should be taken as just that, a concept to take inspiration from. If after a test run the 50/30/20 suggested percentages don’t work for your lifestyle, edit them. That’s what I’m currently doing.

Zero-Based Budgeting

This is the system I followed all the way through my degree as getting student loan payments in termly instalments made normal monthly budgeting hard. A Zero-Based Budget is where every penny coming in is assigned a role. That could be rent, bills, Netflix, groceries… you get the gist. Look at exactly what is coming in and what that needs to cover and then get assigning. This budgeting method is a great way to incorporate in sinking funds to hit your savings goals.

Cash Envelope System

Feel like your money is getting a little out of control and doesn’t feel tangible? Give the Cash Envelope System a try. This is where you literally take cash out of the bank and split it up into your spending categories. Get an envelope set up for each of your categories and then once the envelope is empty, your spending for that category is done. It might take a few tries to get the cash values right but it is a good control test. Plus literally seeing the money coming and going is a great way to reconnect with your money.

There you go, three classic budgets to test out if you are new to budgeting or feel like your current system isn’t working.

Have you tried any of these? Do you have a favourite?