For many, creating a budget can feel constraining. In actuality, though, a budget does the opposite of boxing you in; it gives your relationship to your money a framework and can be incredibly freeing. And if you create your budget thoughtfully, you can maintain or even increase your quality of life while gaining control over your finances. Not sure where to start? Below are four budgeting methods to consider and some pointers on how to get started.

On this page:

• The calendar method
• The zero-based budget
• The envelope system
• The percentage-based budget
• Budgeting tips and tricks

The calendar method

With this method, you’ll write down your monthly bills, when they’re due, and their expected amounts. You can do this on a physical printed calendar or by simply writing down dates in a notebook. The physical calendar method can be particularly impactful for those who like to consume information visually, as it allows you to see the bills placed at their respective times of the month. This method doesn’t allocate specific percentages of money to any particular area of your finances, but that’s the beauty of it. Want to pay down a certain amount of debt each month? Schedule it. Want to save for a big purchase? Schedule it. Want to allocate a portion of your check to savings? Schedule it. You can make this method work for you no matter what your goals are.

The zero-based budget

The zero-based budget gives every single dollar that you earn each month a place to go. To start, write down how much you plan to make in a month (or in a pay period, whichever works best for you). Then write down your expenses and subtract the amount from your total pay. If you have extra money left over (hopefully you are making more than you spend!), find a job for it. Allocate it to savings, to debt, to investments, or to any other goal you have. The point is to find a place for every single dollar before you actually earn it. If you tend to overspend or have trouble sticking to goals, this method could work well for you, as it gives you a solid plan for all of your income. This method works best if you are paid on a regular schedule and in regular amounts; those with significant variation in their paychecks may find this method awkward.

The envelope system

This is an oldie but a goodie! With the envelope system, you’ll designate categories and put a pre-determined amount of money into those categories with each paycheck. Your categories can be anything you want. You can go simple with just “needs,” “wants,” and “savings,” or you can create specific categories for your unique goals. The envelope system was traditionally done with actual envelopes and cash money, which can still be a good way to budget if you find yourself motivated by cash rather than by numbers on an online banking screen. You can do this digitally, though, by using spreadsheets or even by opening separate accounts for a few different goals.

The percentage-based budget

This budget could be a good choice for numbers-minded folk. With percentage budgets, you allocate certain percentages of your income to certain financial needs. A few different versions exist, including the 50/30/20 budget (50% to needs, 30% to wants, 20% to savings) and the 80/20 budget (20% to savings and the rest to whatever you’d like), but you can make this budget strategy into whatever you’d like. Just like the envelope method, you can create your own percentages that work for your goals. With this method, though, you’re using percentages and not amounts. This means that a percentage-based budget could be a better choice for those whose paychecks vary. You may not make the same amount each pay period, but you can always break your paycheck down into percentages.

Budgeting tips and tricks

If you are new to budgeting, you might want to keep a few things in mind. These tips and tricks increase your chances of sticking to your budget and reaching your goals.

• Be realistic. You need some breathing room in your budget. Unless you are in dire straits, you probably have the ability to allocate some “fun money” for yourself. Having money to play around with each month—and the amount is completely up to you—can keep your mood up and increase your quality of life.
• Switch methods if you need to. If you’ve never budgeted before (and even if you have), it’s okay to play around. Try different methods until something feels natural and easy to stick with. If you’re dreading creating a monthly budget or find it frustrating and difficult, you’re probably using the wrong method. Budgeting shouldn’t be a fraught endeavor.
• Allocate money for savings and retirement. No matter the budget method you use, you should always plan for some money going into savings or retirement. If you don’t have an emergency fund built up, make that your first priority. Once you have some financial padding in the bank, your extra money can be allocated to retirement savings and/or investments.
• Practice patience. Every month is different, even if you make the same amount of money. Bills vary, emergencies arise, and goals change. You may need to adjust your budget in lean times, and you can reallocate your money in good times. You’ll slip up, get off budget, and get frustrated. That’s life. Be kind to yourself, take a deep breath, and move on. Your budget gives you the tools and the financial framework to move on from mistakes and hard times, so practice gratitude for finding a method that gives you control.

There you have it! Hopefully one of these methods works for you. Happy budgeting!