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3 Types of Budget Plans to Try Out This Year

Posted: 29 Jan 2024

2 mins to read

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Here are five budget plans that could help you manage money and improve your finances:

Budgeting is crucial for saving money, paying off debt, and achieving financial stability. Finding the right Budget Plan is key, as one size doesn't fit all.

Explore these three simple budget plans tailored to different preferences:

The 50/30/20 Plan

One of the most popular budget methods is the 50/30/20 spending plan. With this budget, there are only three spending categories you'll need to keep track of, allocate 50% of your income to needs (essential expenses), 30% to discretionary spending (lifestyle choices), and 20% to financial goals (savings, debt repayment, or investment).

Of course, you can always tweak your ratios to better meet your current financial situation and goals. For example, if you have a lot of debt or a small emergency fund, it may make sense to put more than 20% of your budget toward those goals and dial back your discretionary spending.

Envelope System (AKA Cash Stuffing)

The envelope system, also known as "cash stuffing," is an old-school budgeting method using physical envelopes and cash. Categorize your spending, assign a budget to each category, and place the corresponding cash in labelled envelopes. Once an envelope is empty, spending in that category stops. Be cautious about shifting cash between envelopes, as it may impact crucial expenses.

Note that some payments may not be made in cash, requiring separate consideration. This method is ideal for cash users seeking strict money management. If you prefer digital options, our budgeting tool offers a similar experience to traditional envelope budgeting.

Pay-Yourself-First Budget

Also known as "Reverse Budgeting”, prioritize savings and debt goals by setting aside money first when you receive your pay check. Afterward, use the remaining funds for other expenses. This method simplifies tracking spending while ensuring financial priorities are met.