The Best Budgeting Methods For Beginners – 50/30/20, 80/20, Or Zero-Based
The information provided in this blog post about budgeting methods is for informational purposes only and should not be considered as financial advice. The author of this post is not a professional financial advisor, and the content presented here is based solely on personal opinions, experiences, and research. This blog post may contain affiliate links, which means that I may earn a commission if you click on the link and make a purchase, at no extra cost to you. Please note that I only recommend products or services that I personally use and believe will add value to my readers.
More than likely, you have seen people on TikTok or Pinterest showing you how they budget with popular budgeting methods like the 80/20, 50/30/20, and zero-based methods.
But how do you know which one works for you when creating your first budget?
In the beginning, all this information can overwhelm you and cause you to give up on budgeting altogether.
But do not fear! My husband and I used to feel the same way, but since we have used one of the budgeting methods in this post, we have been able to pay off 30K in debt in less than one year!
You may want to take notes because, in this post, we’ll go over:
- The 50/30/20 Budgeting Method
- The 80/20 Budgeting Method
- + The Zero-Based Budgeting Method
And if you still need more… I have created the Beginner’s Budget Blueprint course that goes into more depth about budgeting and improving your finances, which you can snag here or at the end of this post!
So, if you’re ready to change your life, control your finances, and pay off debt, learning the budgeting methods that works best for you is your first step. Let’s begin!
The 50/30/20 Budgeting Method
If you’ve researched budgeting in the past, I’m almost certain you’ve seen or heard of the 50/30/20 budgeting method. But what is it?
When using this method to budget, 50% of your income is budgeted for your needs, such as food, utilities, shelter, transportation, or the “four walls,” as Dave Ramsey would call it.
Want to know more about Dave Ramsey’s Baby Steps? Check out my blog post about them here!
30% would go to wants, like your morning Starbucks coffee or the blanket you found at Home Goods that you want.
Leaving 20% for savings and other future goals.
While this budgeting method seems straightforward for beginners wanting to better their finances, the percentages seem outdated when many of us pay over 35% ALONE to our housing needs.
This strict method does not account for the high cost of living we experience today, so I do not recommend using this method when starting your budgeting journey.
The 80/20 Budgeting Method
The 80/20 budgeting method is almost identical to the 50/30/20 method but gives more freedom in your needs/wants category.
With this system, you allocate 80% of your income to needs and wants combined, whereas with the 50/30/20 method, the two categories were clearly defined.
This method still leaves 20% for savings but allows for more freedom in your budget and is more modern than the 50/30/20 method.
However, I still believe this method is too structured and does not account for the uniqueness of each person’s life and budget.
While there are many budgeting methods for you to try, the easiest to use and most personalized (and my personal favorite!) method is the zero-based budgeting method.
The Zero-Based Budgeting Method
When using the zero-based budget, you calculate your total income and give every dollar a purpose until you are down to $0. Hence, why it’s called zero-based.
There are no percentages involved. There’s no outrageous structure to fit in. It’s just you telling your money where to go.
Ultimately, creating a budget that works for you and your unique needs is the key to sticking to said budget and improving your finances.
This has been the only system my husband and I have been able to make work for us, and because of it, we have paid off over 30 thousand dollars in debt in less than A YEAR!
My Beginner’s Budget Blueprint is based entirely on zero-based budgeting. To learn more, check it out here!
BEGINNER'S BUDGET BLUEPRINT
Learn how to budget step-by-step with 4 modules, over 15 video lessons, a 40 page course workbook, + budgeting spreadsheet!
Budgeting with the zero-based method helped me and my husband pay off 30K in less than ONE year and it can help you improve your finances, too!
The peace and contentment that comes with having your bills on autopay, knowing you can afford minor emergencies that arise, and knowing you are making a lasting change in your life is unmatched.
It’s freeing. And I want you to feel that way too!
Because I believe in this method SO much and want to help others get out of debt, build wealth, and create the lives of their dreams, I have launched my course, the Beginner’s Budget Blueprint, to dive deeper into this method and help you do just that!
In this course, I take you step-by-step through setting your financial goals, organizing your finances, creating your budget, staying consistent with budgeting, and SO. MUCH. MORE!
If you’re ready to improve your finances, learn how to budget, get out of debt, and create your dream life, you need my Beginner’s Budget Blueprint course!
BEGINNER'S BUDGET BLUEPRINT
Ready to take control of your money for good?
Your step-by-step guide to stress-free budgeting is here!
Building a budget should be unique, just like you, and that is why the zero-based budget beats the structured 50/30/20 method and 80/20 method.
I encourage you to try the zero-based method in your budget and see how it improves your finances!
Make sure you sign up for my email list and enroll in the Beginner’s Budget Blueprint Course for more information!
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