These Budgeting Strategies May Help You Save More

Knowing how much money you spend each month and making a savings plan for your remaining income are essential steps to mastering your money skills.

Making a budget can accomplish both tasks and personalize your spending plan to motivate you to follow through. These budgeting rules can simplify your finances.

  1. 50/30/20 Budget
  2. Values-Based Budget
  3. Envelope System
  4. Zero-Sum Budget
  5. Pay Yourself First
  6. A Few Bonus Basic Budgeting Tips

50/30/20 Budget

The 50/30/20 budgeting rule is one of the most popular rules because of its straightforward structure and flexibility with how you can spend your money.

You can divide your paycheck into three different spending priorities:

  • Needs (50%)
  • Wants (30%)
  • Financial goals (20%)

The “needs” category can include housing, food, minimum debt payments, and other basic necessities. “Wants” are streaming services, takeout and hobbies.

It’s also important to set aside money for savings, retirement and potentially making extra debt payments.

You may also decide to adjust the budget percentages to fit your situation. One example is 60% for needs and 20% for wants if you have high housing costs or a mountain of debt.

If your monthly expenses are low, you can boost your financial goals above 20% to save more for your emergency fund, retirement or pay off high-interest debt early.


  • Can spend money on needs, wants and money goals
  • Structured budget with the ability to make adjustments
  • Can determine what’s an essential and optional expense


  • A percentage-based budget may not be as focused as a dollar-based budget
  • Low-income earners may struggle to stay within 50% needs recommendation
  • May discourage from saving more money

Values-Based Budget

Standard household budgets can feel restricting and stifle joy. The values-based budget motivates you to wisely spend your money on the expenses most important to you.

After setting aside money for your basic necessities, you can plan for short-term and long-term goals.

Some examples can be:

  • Annual vacation
  • Getting out of debt
  • Helping charities
  • Early retirement
  • Starting a family
  • Buying a larger home

It’s important not to lose sight of your long-term financial goals. Be sure to diversify your money values and routinely save for retirement and upcoming large expenses.


  • Can provide more satisfaction than other strategies
  • Can prioritize personal money goals
  • Very flexible


  • It can be easy to only focus on short-term goals
  • Less structured than other budget methods
  • Doesn’t automatically encourage saving unspent income

Envelope System

The envelope budget system can be one of the best ways to prevent overspending on a particular expense. You determine how much you’re going to allocate for each expense before the month starts.

If you exhaust the balance for a particular category for that month, you stop spending for that category until the next month. You can set aside more cash for the next month.

Consider making weekly envelopes if forecasting your monthly expenses is difficult.

This budget system can be more rigid than other budgeting strategies but money envelopes can help you visibly see how much you spend in real-time.

While most people now pay electronically or with a payment card, the envelope system can be effective in a digital world. Several apps can track digital payments if this budgeting method appeals to you.


  • Prevents overspending
  • Can accurately track spending by category
  • Can budget weekly or monthly


  • Must predict expenses upfront
  • Works better with cash than digital payments
  • Can be too restricting

Zero-Sum Budget

The zero-sum budget gives each dollar you earn a purpose. This strategy is also known as line-item budgeting as you assign a specific dollar amount to each expense type.

Instead of focusing on staying within a certain percentage for needs, wants and priorities like the 50/30/20 rule, you compare your total monthly spending to your monthly income.

Your total monthly spending and savings are equal to your monthly income. You get to decide how you spend and save your cash after paying for your basic living expenses.

The easiest way to track spending is using a budget spreadsheet or pen and paper. You can list the estimated and actual spending amounts in side-by-side columns.

This strategy can be a good fit for people who have extra money each month that may sit in a checking account waiting to be spent or earn passive income.

Giving a purpose to each dollar can encourage you to increase your savings rate if you don’t need to pay for immediate expenses.

If you have extra income, you can transfer the excess cash into a slush fund to cover future budget shortfalls.


  • Can make it easier to fund money goals
  • Customizable
  • Good for stable and variable monthly incomes


  • Can be time-consuming to track spending
  • Doesn’t recommend spending limits for needs, wants and goals
  • Can be challenging to plan with a variable income

Pay Yourself First

Sometimes called the Anti-Budget, the “Pay Yourself First” strategy is for those that dislike the hassles of traditional budgets. The other budget alternatives may not be as good because the level of flexibility may not emphasize saving money.

Paying yourself first means you deposit into a savings account. So, instead of hoping you have enough cash to save money this month, each deposit can achieve your minimum savings goal.

As bills come due, you withdraw from your savings account. Having to pay others from your savings can challenge you to reduce unnecessary expenses and optimize your spending power.

If pursuing this strategy, verifying your deposit accounts allows penalty-free withdrawals. High-yield savings accounts are excellent for earning the best interest rates but federal law only permits up to six monthly withdrawals.


  • Prioritizes saving money
  • Can be less time-consuming than other budgets
  • Customizable categories


  • High monthly expenses can reduce savings potential
  • Doesn’t distinguish between needs and wants
  • May require previous budgeting experience

A Few Bonus Basic Budgeting Tips

It doesn’t matter which budget method you find to be the best option for your situation. A budget can help you control spending and optimize your savings rate.

These guidelines can also help make your budget more successful.

Track Expenses

It’s important to manually track each expense or use an expense tracking app. Not knowing exactly how you’re spending your money means you might be overspending without realizing it.

You can accomplish this easily by using free budgeting apps because they can track these for you.

Be Flexible

Some months are going to be more expensive than others. And it can also be hard to estimate your expenses if you’re an inexperienced budgeter.

Learn from your mistakes and adjust your spending categories until you find your spending and savings balance.

Consider Weekly Budgets

Weekly budgets can be more time-consuming but can be easier to plan if you have fluctuating income and expenses. Knowing your monthly income and expenses can make long-term financial planning easier.

However, taking life one week at a time can be less stressful in some situations.

Putting It Together

A budget is one of the best ways to improve your current financial situation. You can prioritize financial priorities and identify areas to reduce expenses. It’s possible to master new money habits that can become automatic and remove financial stress.

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