The No-Stress Guide to Budgeting: 5 Simple Methods to Grow Your Savings and Crush Your Money Goals

Ever wished you had a simple plan for your money?

I know, I know – financial planning doesn’t exactly sound like the most exciting topic.

But trust me, having a budget is super important for taking control of your money. And here’s the thing – there’s no one-size-fits-all approach to budgeting!

Finding the right money management method for you might take some trial and error. Did you know there are several different ways to budget? Whether you’re just starting with budgeting for beginners or looking to improve your financial planning skills, I’ve put together a simple guide to help you figure out which budgeting approach may work best for you and your family.

Ready to take control of your finances? Let’s dive in!

Why you need a Budget

Before we look at different budgeting systems, let’s chat about the pros and cons of budgeting in general.

Benefits

• You’re in control of your money. Money is a tool, and your budget is like the instruction manual.
• You can plan for your goals. Whether you want to buy a house, a car, or save for retirement, it all starts with your budget.
• You get a clear picture of your finances. Want to know if you can afford those painting lessons or that beach vacation? Your budget will tell you!
• Your finances get organized. Budgeting gives you a list of all your expected expenses for the month.
• You can track your spending. If you don’t know where your money is going each month, that’s a problem! Tracking helps you reach your financial goals.

The Struggle

• It can take time. Planning where every dollar should go (or tracking where it went) can be time-consuming.
• You need to update it monthly. Budgets aren’t “set it and forget it.” Every month is different – like December, when you might need more money for holiday gifts.
• It requires discipline. Planning how to spend your money is the “easy” part. Sticking to the plan is harder. It can be tough to say no to impulse buys, eating out, or that daily coffee habit.

Five Ways to Budget Your Money

Now let’s talk about the different budgeting methods you can try!

1. The Traditional Budget

The traditional method (or line-item budgeting) is what most people think of as the “classic” way to budget. With this approach, you categorize ALL your spending and get really detailed about where your money goes.

This method is probably the most tedious because it’s so detailed, but some people really need that level of tracking.

Who it works best for: People who tend to overspend, are trying to pay down debt, or want to save more AND don’t mind getting into the nitty-gritty details.

How to make a traditional budget:

1. Start with your income – list all money coming in (paychecks, rental income, alimony, etc.)
2. List all your expenses – both fixed and variable. Be SPECIFIC! Don’t just have “food” – break it down into groceries, fast food, restaurants, coffee runs, etc.
3. Include savings and debt payments
4. Track your spending – there’s no point in budgeting if you’re not keeping tabs on where your money actually goes
5. Compare your estimated vs. actual spending as you go through the month

The downside: If you hate details or struggle to make time for budgeting, this might not be for you. With so many categories, it’s easy to get discouraged.

Helpful tip: Try using budgeting apps like Mint (it’s free!) or YNAB (free for 34 days, then a month fee). These sync with your bank accounts so transactions are automatically imported and categorized!

2. The 50/30/20 Method

Looking for something simpler? Take a look at the 50/30/20 method. It’s a percentage-based budgeting system. It’s simple– put 50% of your after-tax income toward needs, 30% toward wants, and 20% toward savings or debt repayment.

Who it works best for: People who can’t stand dealing with tons of details but still need to track their spending.

The big plus: Instead of having dozens of budget categories like with a traditional budget, you have just THREE!

How to set it up:

• 50% for NEEDS: These are things you absolutely must pay for:
  • Housing (rent or mortgage)
  • Utilities
  • Groceries
  • Minimum debt payments
  • Transportation to work
• 30% for WANTS: These are things that make life more enjoyable:
  • Dining out
  • Cell phone
  • Clothing
  • Cable & internet
  • Gym membership
  • Coffee shops
  • Entertainment (movies, books, music)
  • Personal care (haircuts, pedicures)
  • Hobbies and classes
• 20% for SAVINGS & DEBT: This is money for your future:
  • 401(k) contributions
  • Emergency fund
  • Sinking funds (more on these later!)
  • Extra debt payments

The downside: Since you’re not budgeting for every little category, it’s easy to overspend in one area and forget about upcoming expenses (like those quarterly insurance premiums).

Helpful tip: Pad some categories to give yourself a little wiggle room.

3. The Cash Envelope Budget

This method is exactly what it sounds like! Made popular by finance guru Dave Ramsey, you use cash for most of your spending.

You still have budget categories, but they’re set up as actual envelopes with the right amount of cash inside each one.

Who it works best for: Overspenders, this is totally your jam! When the cash in the envelope is gone, that’s it – no more spending in that category!

The big plus: It makes it nearly impossible to overspend (as long as you don’t break out your credit card when the cash runs out). Plus, it feels more “real” when you have to hand over actual cash instead of swiping a card.

How to set it up:

1. Create a budget with all your expenses (the envelope system isn’t the budget itself – it’s how you carry it out)
2. Decide which categories will use cash envelopes:
   • Groceries
   • Eating out
   • Entertainment
   • Gas
   • Clothing
   • Personal spending money
3. (Optional but recommended) Divide your monthly cash into weekly envelopes
4. Keep track of your spending (tuck receipts in each envelope)
5. Evaluate at the end of each month

The downside: You’re carrying cash, which can be lost (and your bank won’t reimburse you). Also, many bills are paid online or automated these days.

Helpful tip: Try a hybrid approach! Use cash envelopes for day-to-day spending, but keep a separate envelope for tracking online purchases and another for automated payments.

4. Zero-Based Budget

A zero-based budget means your income minus expenses equals zero.

Important note: This doesn’t mean you have zero dollars in your bank account at month’s end! It means every dollar has a specific job. Nothing is left “floating” without a purpose.

Who it works best for: People who want to cut “waste” from their budget and be super intentional about where every dollar goes.

How to set it up:

1. Add up your income for the month
2. List all your expenses (housing, utilities, food, transportation, etc.)
3. Account for sinking funds, emergency funds, debt payments, and savings
4. Review your financial priorities (paying off debt? saving for a house?)
5. Subtract all expenses from income until you reach zero
6. Track your spending throughout the month

The downside: Since you’re accounting for every single dollar, you need to track every dollar spent. If tracking spending is your weak spot, this might be challenging.

Helpful tip: Automate the tracking with apps like Mint or YNAB.

Bonus step: Create a new budget every month. Your expenses will change month to month, so your budget should too!

5. DIY Budgeting Method

None of these methods feel quite right? Why not mix and match to create your own perfect system?

When I first started budgeting, I had no clue what I was doing. So I combined the 50/30/20 method with line-item budgeting. It gave me the structure I needed to make better decisions.

Now I use a mix of the Zero-Based Budget and the Envelope Method to keep myself from overspending and focused on my financial goals.

Whether all, some, or none of these methods work for you – the important thing is to be intentional with your money. Having a plan goes a long way in getting you where you want to go!

What about you? Have you tried any of these methods? I’d love to hear about your experiences with budgeting in the comments below!