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A Review Of 5 Significant Budgeting Strategies

Tracking Your Spend

Who is it?

For those who enjoy working on an Excel spreadsheet or personal finance app that helps you manage your money, tracking your spending can be an awesome way to track your finances. This style of budgeting is simply tracking every single purchase you make down to the cent. The reason this strategy remains popular is because it provides a clear window into your current financial habits and allows you to be more aware of where you tend to spend the most.

Does this strategy work for you?


If you are vigilant about certain things such as keeping receipts, never deleting photos from your phone and stay forever on inbox zero, this type of budget might be the cat’s meow. Keep in mind, all of these numbers can be extremely stressful to manage. If you are someone who has attempted to track your spending for months at a time, then you know it can be tedious to remember every single place and consistently update your spreadsheet or app.

How do I rate her?

1/5 stars

There are better ways to monitor your financial habits than to monitor and log every single purchase you make. No one is perfect and this strategy can quickly remind you of that fact.



The 50/30/20 Rule

Who is this strategy suited for?

This budgeting strategy exist as a structure. Here we picture a pyramid, where the base is 50% of your income going towards necessities, the middle is 30% of your income free for discretionary or lifestyle spending, and the tip is 20% of your income, which goes directly to savings goals or debt payoff.

Will this strategy work for you?

If you have a consistent income you have a higher probability of success with this strategy. If you have an inconsistent income this strategy is definitely not for you. However, several career minded and professional folks remain a big fan of this strategy. For a person with a set monthly income and a very simple set of fixed expenses, you can easily make the numbers work.

Keep in mind, this method is not for everyone, for obvious reasons: for example, if you have 30% of your income left over for discretionary spending, many consider that as doing well financially. In today’s economy the reality is that most people are living paycheck to paycheck. Those who are living paycheck to paycheck require a budget that can help control their spending more than the 50/30/20 rule does.

How do I rate this strategy?

2/5 stars

Only having to worry about three percentages sounds easier than trying to divide all of your cash flow into multiple categories. The downfall of this strategy and the reason for my two out of five stars rating, has to do with the state of the economy and unemployment rate at this time. If you live paycheck to paycheck, this plan might be a hard pass.



The “Pay Yourself First” Budget

The “pay yourself first” budgeting philosophy is one that places your savings as a top priority. Instead of focusing on the percentages, this method or strategy concentrates on goals. Not traditional goals, but the essential goals that help with maintaining good financial records. First, you will write down your savings goals. Once you receive your paycheck you will automatically contribute your savings to the necessary accounts, paying yourself first. After you’ve subtracted this amount from your monthly income, the rest will go towards fixed expenses and living expenses.

Does This Strategy work for you?

If you have many financial goals including both short and long term many believe this strategy is definitely for you. On the other hand, if you are struggling to pay your bills each month, you might want to focus on getting those covered before you start with your automatic contributions. Saving is extremely important however, paying bills on time and in full remains more important. Therefore, it is your responsibility to make a decision on what is more of a priority for you and your financial situation.

How do I rate this strategy?

3/5 stars

This strategy may be practical. Just remember, your fixed expenses will always come before your savings.

Envelope Budgeting

What is it?

This non-digital tactic for budgeting your money remains easy to manage but harder to follow through on. The entire system depends on you holding onto the exact amount of cash you need to spend each month, including both fixed and variable expenses. First, you need to determine how much you have available after bills and then you have to decide how much you put aside for savings. First choose your categories for example, household, groceries and entertainment then place the right amount of money in each labelled envelope. Once that envelope is empty, you can no longer spend money on that type of expense. Leftover money can be rolled over to the next month or added to a savings accounts.

Does this work for you?


Today, we exist in a digital and cashless society, this budgeting strategy can seem prehistoric to many. Another way to look at this strategy, it’s an awesome way to take your financial situation offline and allow you to look at the cold hard cash that you spend each month. When a person typically spend more than they earn, this is an awesome way to control lifestyle inflation. The only reason this system might not work for you is if you tend to do a lot of digital transactions such as online banking, Amazon or other shopping. This budgeting strategy may provide a much needed way to disconnect from a digital platform without losing Twitter, Tik Tok, or Instagram.

How do I rate this strategy?

4/5 stars

Baby boomers and yes some Millennials may enjoy the ability to go credit and debit card-free, but if we are being honest with ourselves we realize that in this day and age, it’s really hard to pay rent in cash.

Zero-Based Budgeting

What is this you ask?

This strategy is not like most budgeting strategies that leave some money unaccounted for. The main principle behind zero-based budgeting is that your money income and your monthly expenses should be even. Every hard earned dollar you make has a place that it belongs to. If find $20 left over after paying your fixed expenses and enjoying your non-essential purchases, this system requires you to find a place for that $20 bill. For example you might invest the money, put it in savings, or you place the leftover money on debt repayment. Whatever you choose, the money must be accounted for.

Does this method work for you?

This strategy can provide tremendous benefit for anyone who is planning to save more money. We advocate for zero-based budgeting because rather than keep some lazy money that is not working for you in your checking account, you can turn your lazy money into working money inside a plan that collaborates with every potential financial goal in your plans. For those who keep money back as your emergency fund, why not put it into an actual emergency fund, where it will grow?

How do I rate this strategy?

5/5 stars

You deserve to make every single dollar you earn work for you. Not only that, but this budgeting strategy is good for all incomes and all lifestyles. It’s a win-win in my book.

The Bottom Line

An individual’s mindset will be the biggest factor when an individual examines the best way to budget for themself. Whatever stage of life you are in can significantly impact how you choose to save and spend your money and any budgeting strategy that works for you is the strategy that has the best chance of surviving.

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