9 Best Types of Personal Budgets [How to Choose the Right One for You]

Imagine this: you go to the store and put some items into your shopping cart. After a few minutes of gathering things you need, you head up to the register, where they ask for payment.

And you have a moment of panic as they run your card through the machine, hoping there will be enough money…

Budgets can save you from this scenario. They help you to know what you have, what you can spend, and how best to direct your money so you aren’t stressed about it.

But there are a lot of types of personal budgets. Not everyone is the same, so you need to choose the best one for you. Here are the 8 best types of personal budgets, plus ideas to help you find one that works.

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What is Included in a Personal Budget?

The main things that a budget includes are expenses, saving, and spending. It tracks these categories and helps you to know how much money to place into each section of your budget. 

For expenses, you’ll include things like mortgage or rent costs, utilities, groceries, and other necessities. Your savings would be categories like retirement IRAs or emergency funds.

Last, you also decide how much spending money you can have each month. Spending will include items that you can live without but want to buy, like coffee, extra clothes or shoes, tickets to the movies, and so on.

There are 8 different types of budgets that I’ll talk about today. You can pick the one that makes the most sense to you, or you can also combine a couple of the budgets and create a unique system that helps you be effective with your money.

1. The “No-Budget” Budget

This might sound like a complete contradiction, so what is a no-budget budget? The basics are you pay your bills, save some, and spend the remainder of your cash however you want.

That’s it. That way, everything is already paid for, and what you have left, you can spend.

It’s an excellent approach for people who dislike budgets but need to know that they can pay their bills each month and not spend every penny. 

2. 50-30-20 Budget 

This is a percentage budgeting method that works well for a lot of people. The reason it works is that it’s simple. It also gives you a generous amount of income to spend on expenses, saving, and spending.

What is the 50 30 20 Budget Rule?

The rule is that 50% of your income each month goes to expenses. Rent, gas, food, phone bills, etc. Then 30% is added to savings accounts, retirement, or investments.

Then, you’re left with 20% of your income, which you can spend as you like. Since the rule is in the name – 50-30-20 – it’s easy to remember.

Go more in-depth on the 50/30/20 budget.

Who should use this budget? It’s a pretty good idea for any person who wants to save a lot without making their lifestyle too extreme. It works if you are used to sticking to a budget and can keep your expenses to half of your income.

There are some other variations of this percentage budget, as well, including the 60-20-20 budget or the more strict 30-30-30-10 budget. The basics stay the same, though. One percentage amount for expenses, one for savings, and one for spending. It’s super easy and can help you gain financial freedom.

3. The No Spending Budget

These are best for times in your life where finances are tight or when you have something important you’re saving for. A no-spending budget can be challenging, but it’s very simple in some ways.

With this type of budget, you pay your bills when you get a paycheck, and you save everything else. There is no spending money included with this type of system.

Many people like to do a “no-spend challenge” instead of a no-spending budget. Budgets are usually a little more permanent, but a no-spend challenge is for a set amount of time. Maybe a month while you save all you can. 

A no-spend challenge is a good idea if you are saving for something big, like a house. It can also help you get out of debt. It’s a great way to give your savings a boost and help shorten the time that you need to get to a specific goal. 

No spending budgets are good short-term, whether you’re on a tight budget or not. They can help if you had a costly month (like December is for many people).

They also can get you back on track if you feel like your finances aren’t what you want them to be. It’s a good idea for everyone to do a no-spend budget now and again.

4. The Zero-Based Budget

This technique is easy to use with other budget systems. A zero-based budget means you will budget all of your income, making sure every penny has a place in a category. Since all of your money has somewhere to go, you get your budget to zero each month.

You can use this with a percentage budget, a no-spend budget, or anything else you can think of. It helps you make sure you’re budgeting all of your money instead of just the expenses.

5. The Survival Budget

A survival budget is similar to a no spending budget but is a bit more extreme. It’s usually used in times of financial difficulty when you are struggling to make ends meet. It helps you survive without a lot of money. 

The basics are to add up your monthly expenses and subtract that from your monthly income. After that, see how much is left. You can use this for the next month’s expenses or for something like debt payoff or savings. 

The next step that makes this budget more extreme is going through your expenses and trying to cut back anywhere you can. Stop buying anything unnecessary, and reduce costs for necessary expenses.

That grocery bill can probably be lower. Can you buy gas for your car less often? Can you not buy movies, books, or other items for a while and instead get by with what you have? It’s beyond the basics; it’s learning to live with even less than your usual costs.

Survival budgets can keep you from going into debt or save you when your income is low. They aren’t forever, but they can help you get by.

Related: Budget for Surviving on Minimum Wage

6. The Cash Envelope Budget

This is a practical way to spend and save. The cash envelope system means that you take out money for your expenses in cash at the beginning of the pay period.

You can still choose to pay any larger expenses automatically through your account if you want. Follow this guide for using the cash envelope budget.

Usually, cash envelopes are for things like groceries, gas, fun money, and anything else that you can easily use cash for. You can label each envelope, so you know what it’s for.

This can be helpful if you tend to spend more than you’ve budgeted because once you’re out of cash, there’s no more. 

If you’re just starting out with budgets, this is a good habit to begin. If you continue with it, you’ll probably find that you don’t spend as much, or at least you stay within your budgeting limits. 

Related: Cash Envelope Wallets to Make Budgeting Easier

7. Reverse Budgeting

A reverse budget is unique in that you pay yourself first before you put money towards bills and other categories. It’s a way to prioritize putting money towards your savings and other goals.

It uses automated withdrawals to save a set amount of money every month. The remaining money can then be put towards bills and lastly, fun money.

This budgeting method is great for someone who has trouble saving or who ends up using a lot of their paycheck on entertainment or for consumer goods.

8. The Anti-Budget 

The Anti-Budget is very similar to the no-budget approach, with one significant difference. Instead of paying expenses first, you add money to your savings and investments. After savings, you pay expenses, and then you can spend what’s left. 

So it’s the same concept, but with a slightly different approach that focuses more on your future money. Paula Pant came up with the anti-budget and talks about it on her Afford Anything blog.

It’s a great way to organize your money but without feeling like you have to follow many rules. If you’ve never budgeted before, this can be a great way to start. 

9. The Values-Based Budget 

The values-based budget is all about mindset. You spend money on things that matter rather than the stuff that isn’t important to you.

For example, you may prioritize spending money on travel or a down payment for a house. To spend more on this, you’d spend less on eating out or subscriptions. You decide where your money goes based on your values.

Obviously, before doing this, you need to pay your living expenses. Cover all bills, food, and home costs.

Then with your remaining money, decide how much goes to things that you value and how much is left over for items that don’t matter. Your money will begin shifting towards the values category instead of the “doesn’t matter” one. That way, your income is helping you do what you want to do.

I love values-based budgeting because it’s practical. You aren’t spending and saving for things you don’t care about. Instead, you’re creating better opportunities and doing what you want to do.


How To Choose the Right Budget System For You

There are a lot of types of personal budgets because everyone is so different. Some people have variable income; others earn the same amount each month. Maybe you like to save every penny, or perhaps you’d love to spend more. 

The important thing to remember is that there is no one size fits all budget. As long as you’re paying your bills and making plans for your money, you are doing a great job! And it does take time to get your budget perfected, so allow yourself some room to learn.

Trying to decide on a budgeting method? Ask these questions and use your answers to help!

  • Do I naturally save money or spend it?
  • Do I like having a lot of guidelines for my finances?
  • Do I dislike rules and want more freedom?
  • How much income do I make each month?
  • What are my financial priorities?
  • Am I trying to get out of debt?
  • How much do I have in savings?

After answering these questions, you should make some decisions about what types of personal budgets will work for you the best.

Know the Best Types of Personal Budgets So You Can Choose The Right One For You

The types of personal budgets are endless, but the 8 examples listed above are pretty standard ways to organize your money. There are many others, though.

You might choose to combine a couple of types of budgets. For example, a values-based budget with a percentage budget.

Since your budget is only about you and your family, you can modify it any way you want to create something that works consistently.

You may also find that you don’t like any of the budgets mentioned here and prefer something else. That’s fine, too.

I would recommend trying out a couple of them before deciding, though. If you still don’t feel like your budget is working, ask yourself the questions listed above to figure out what would be best. 

Also, don’t be afraid of budgeting! The entire point is for it to help you handle your finances the way that you want.

But remember, a budget isn’t there to make you feel bad about money decisions or to make you constantly think about finances. It’s there as a guide, but since it’s for your benefit, you don’t have to be worried about adding it into your life.

Trying out a budget already means that you are being more successful with money than many people. If you get off course, just adjust your budget and move forward. Budgets aren’t for guilt; they’re for helping your finances be in the best shape possible.

If you’re unsure about which budget is right for you, look through the list again. You can decide on the perfect budget by reading through the information and then trying out what makes the most sense to you.

You can modify it as you go or follow it completely. With so many to choose from, one of these types of personal budgets will work for you. And a budget can change your financial future. 

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Want somewhere to track your money across all accounts?  Grab this free financial dashboard to track your savings, retirement, net worth, and more!

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Steffa Mantilla

Certified Financial Education Instructor

Steffa is a Certified Financial Education Instructor (CFEI) and the founder behind Money Tamer. Her 12-year background in operant conditioning and positive behavioral change training is used to help people find effective motivators to change their harmful money behaviors. Steffa explains the reasons “why” behind people’s financial behaviors and how to successfully change them. After paying off over $80,000 in debt through budgeting, she now teaches families how to get their own finances in order. You can learn more about her here.

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