Updated: Sep 08, 2023

How to Find the Best Budget for Your Lifestyle

Find out what the best budget is for your particular lifestyle along with tips and tricks to make budgeting much easier.
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Few things are as crucial to your financial health and peace of mind -- or as daunting to confront -- as a budget.

The word itself is a downer, associated with scarcity, belt-tightening, and no-fun nights at home eating pasta (again) while everyone else is out having a good time.

That’s one way to look at it. Here’s another: Budgeting doesn’t have to be about what you can’t have. It can be about taking control and getting exactly what you want. As leadership guru John C. Maxwell put it:
“A budget is telling your money where to go instead of wondering where it went.”

Most of us have a predictable income every month and fixed (rent, car payment, internet) and discretionary (entertainment, eating out, hobbies) expenses.

Once you’ve laid out those figures, there are a couple of ways to approach setting up your budget.

First Things First: Divide Your Monthly Income

Zero-Based Budgeting

Zero-based budgeting is a common business tactic in which every month starts at zero.

From there, all of your expenses should be accounted for; spending must not outpace income for the month.

If you overspend on one category, you’ll come up short in the others. If you find that you're going negative at the end of the month, analyze your discretionary expenses to see where cuts can be made.

The 50-30-20 Budget

Elizabeth Warren (the current U.S. Democratic senator from Massachusetts) and daughter Amelia Warren Tyagi based their 2005 book “All Your Worth: The Ultimate Life Money Plan” on 50-30-20 budgeting. Here's how it works:

  • 50% of your income is dedicated to essentials
  • 30% is allocated for wants
  • 20% is set aside for savings and debt reduction

Warren and Tyagi call the 50-30-20 method The Balanced Money Formula. And, while they see it as a realistic division of income, the percentages are only a guideline and should be adjusted according to your circumstances. 

Their advice:

“Just do your best. If you can’t save 20%, can you save 15%? If you can’t get your Must-Haves down to 50%, can you get them down to 55%? Getting your money in balance is one of those things where close really does count.”

Planning Your Budgeting Options

Now that we’ve looked at a couple of ways to divvy up your monthly income, let’s explore your budgeting options. Are you a visual person who loves spreadsheets?

Do you prefer writing things out by hand? Were you born with a smartphone in your hand?

No matter what your lifestyle, there’s a budgeting method out there for everyone. Check out our list below and see which one suits you.

Put Your Budget on Cruise Control

If you’re a busy person with a steady paycheck, put your budget on cruise control. Once you've divided you monthly income, set up automatically recurring payments through your bank's website.

If you do this just once, you won't have to worry about remembering to make payments again. This also helps prevent the possibility of late payments and the fees that accompany them.

Even though your budget is on cruise control, don't forget to check in periodically to make sure everything looks right. Mistakes and fraud can happen, so review your bank account at the end of the month just to make sure the transactions made were in fact yours.

Worry about accidentally overdrawing your account? Try this: in All Your Worth, Warren and Tyagi suggest keeping $1,000 of “just in case” money in your checking account. That will help you deal with any unexpected expenses that may go through and give you a buffer if you need it.

Let Apps Keep You in Line

If you’re a digital native, using an app to manage your budget is the obvious answer. First, choose the app that will work best for you. Then, sit back and enjoy automated visuals of your budget.

Apps like Mint (free) and You Need a Budget (paid) track and categorize your spending, graph progress toward your goals, alert you to bill payment due dates, and keep you abreast of your credit score. All of this is with little to no effort on your part after initial setup.

If you do most of your banking online and make most of your purchases with credit and debit cards, you’ll be able to effortlessly develop an accurate picture of your spending patterns. If you're a visual learner, seeing your financial life neatly organized in colorful graphics and charts can be extremely motivating.

Use the "Write" Stuff

For many, the automation of an app is incredibly useful, but for others it can be too much out of sight out of mind. If that sounds like a problem you might run into, paper and pen are going to be your best friend. There are other benefits to this method as well:

Recording your income and expenses by hand has a way of making the figures “real.” According to Lifehacker, the brain’s reticular activating system “acts as a filter for everything your brain needs to process, giving more importance to the stuff that you’re actively focusing on at the moment — something that the physical act of writing brings to the forefront.”

In Write It Down, Make It Happen, Henriette Anne Klauser says stimulating the RAS “sends a signal to the cerebral cortex:

"‘Wake up! Pay attention! Don’t miss this detail!’ Once you write down a goal, your brain will be working overtime to see you get it.”

The only downfall to this method is that you'll need to be extra diligent in your transaction recording. Save your receipts and log them at the end of every day to be sure you don't miss a thing.

Calculate with Spreadsheets

If you prefer a just-the-facts approach to budgeting, consider a spreadsheet. Excel and Google sheets aren't colorful or automated, but they are simple, straightforward, time-tested classics.

For some, spreadsheets can be overwhelming, but once you get started they can be extremely easy to use.

Check out YouTube for tutorials or study up on websites like GeekGirls to help you get started. Once you learn how to enter in formulas, you can make a spreadsheet that automatically changes all the calculations once you enter new numbers in. A nice middle-ground between the benefits of manual tracking and apps.

Make A Buckets List

If you’re comfortable with some automation but prefer to hit “SEND” on those bill payments yourself, consider funneling money into buckets for individual bills or goals.

Some call this The Envelope System, in which  you would put a certain amount of money from each paycheck into a categorized envelope. For example, you could have an envelope for rent, an envelope for food, an envelope for a vacation, and so on.

Sandy Smith of Yes, I Am Cheap is a huge proponent of the envelope system and attributes it to helping her pay off debt. If you love this idea but prefer not to have cash laying around, you could try digital envelopes:

CapitalOne360 allows users to open “subaccounts” of their savings accounts so they can fund specific goals. 

Ally lets customers open multiple savings accounts for the same purpose. After calculating your budget and deciding how much you can save from each pay period, set up automatic transfer for that amount to go directly into one of these special savings accounts.

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Keep Trying Until You Find Something that Works

Here's the thing about putting different budgeting methods on for size: sometimes they'll seem like they fit when in reality they don't. If you try one for a month and find no success, try another for the next month.

Keep tweaking until you find the right method for you and you'll be sure to land on a method that matches your lifestyle.

When it comes to budgeting, it's a marathon, not a sprint. Just keep trying and you'll eventually find something you can stick to for a long time to come.