Not sure you're using the right budget? Here are 6 different styles to consider.

Are You Using the Right Budget? 6 Alternatives That Might Be Better

How to know if you’re using the right budget. (And alternative budgeting methods that might be better.)

Based on your personality type, financial situation, and other factors, the right budgetfor someone else may not be right for you.

So how do you know which budget is best?

When you find the right budget, you should feel able to understand, implement, and stick to it.

By choosing a system that fits you, you can increase your chances of reaching your financial goals! 

So take a look at the options below. 

Whether you like a traditional budget with daily tracking, or you want something a little less structured and time-intense, there’s a budgeting system here to help you spend less, save more, and get out of debt!

1. Bucket Budget

This less traditional budget is perfect for people who feel they don’t have time to track expenses.

The bucket budget divides income between two checking accounts and a savings account.

It requires minimal tracking, and it automates paying bills, putting aside savings, and designating money for variable expenses.

Figure Out Fixed Expenses and Savings

To begin using this system, set up your income to be deposited into checking account number 1. 

Then figure out the total cost of your fixed expenses and decide how much money to put into savingseach month.

Next, figure out how much money is left after savings and fixed expenses are subtracted from your income–this money (or a portion of it) will be used for variable expenses.

The Framework

It takes a bit of work to set up the structure for this budget, but once that’s done it’s pretty easy!

You’ll need to set up two checking accounts and a savings account. 

Checking Account 1: 

  • Automatically deposit paycheck here
  • Automatically pay bills from this account
  • Automatically transfer money from here to savings account
  • Automatically transfer a specific amount of money from here to checking account 2 for variable expenses

Checking Account 2: 

  • Automatically deposit money for variable expenses here
  • withdraw money for variable expenses 

Savings Account:

  • Automatically deposit money for savings here
  • you may transfer this money to other savings accounts or investments

2. Percentage Based Budget

For those who aren’t sure if they’re overspending in certain categories, percentage based budgeting is where it’s at. 

Just determine what percentage of your income you’d like to allot to each spending category, and translate that percent into a dollar amount.

Figure Out Income, Categories, and Percentages

First, list all your sources of income and add up the amount earned.

Make a note of your total and keep the number handy for the next step.

List all of your budgeting categories and decide what percent of your income you’ll allot to each category. 

If you’d like some guidelines for percentages, check out this chart from

Keep in mind that percentages may need adjusting based on where you live and other factors. recommends your income be used in the following way :

  • 10-15% put towards charitable donations or giving
  • 25 -35% put towards rent or mortgage
  • 5-10% put towards gas, electricity, water, etc.
  • 10-15% put towards eating
  • 10-15% put towards transportation costs
  • 5-10% put towards healthcare
  • 10-15% put towards insurance costs
  • 10-15% put towards personal spending
  • 5-10% put towards fun
  • 10-15% put towards savings
Change Percentages into Dollar Amounts

Now it’s time for some math.

Let’s say your monthly income is $5,000 and you’d like to spend 5% on recreation.

You would complete the equation:

5,000 x 0.05 = 250

Now you know that you’ve got $250 to spend on recreation. 

If you’re putting 15% towards savings simply do the following math:

5,000 x 0.15 = 750

That means you’ll put $750 in savings. Simple!

Budget Planner

If you’d like an awesome budget tracker that will tell you how much (in percentages) you’ve spent in each category of your budget, check out this planner from

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 3. Zero Based Budget

A zero-based budget means that your money earned minus expenses = zero.

In other words, each month you need to decide where to spend/save/invest every penny of your money, so you know exactly where everything is going–nothing is left over.

Add up all your income and expenses:

Add up all income and list all expenses, including groceries, savings, investments, car maintenance, money for entertainment, etc.

The total amount of expenses should equal the total amount of income. 

Subtract expenses from income:

For this step, simply subtract total expenses from total income.

The leftover money should be $0. If it’s not zero, you’ll need to adjust your expenses accordingly. 


If you’d like a free printable for a zero based budget, check out this FREE printable from 

4. Cash Envelope Budget

If you need some help with self control, the right budgetfor you may be the cash envelope system.

Cash envelope budgeting involves — surprise — spending only from cash that you’ve divided into envelopes. 

You can choose to do your entire budget in this method, or just the parts of your budget that you have a hard time sticking to, like ‘fun money.’

Set up Envelopes

Figure out how many categories of spending you’ll be using. Get the appropriate number of envelopes and label them.

One category per envelope.

Figure out the Money

First, you’ll need to figure out how much money will go towards bills, savings, and investments.

Subtract this amount from your total income, and the remaining money can be divided and used for the envelopes. 

Now you’ll need to figure out how much money you want to spend in each envelope category. 

Add up the category amounts to find out how much money you should withdraw from the bank (this amount needs to be no higher than your income minus savings, investments, and bills).

Withdraw Cash, Divide Money, Stick to It

Now withdraw the cash and put the appropriate amount in each envelope, and commit! 

You’ll have to learn to pre-plan and take the appropriate envelope with you when you go shopping or eating out. 

If you forget your envelope at home, don’t put it on your credit card — go home and get the money!

If the envelope is empty, wait until next month!

This approach takes a lot of discipline, but it’s effective.


If you’d like a printable for your envelope budget, check out these adorable envelopes from 

5. Short-Term Budget

This type of budget is great for people who don’t want to commit to a strict budget forever and want to improve their finances quickly. 

short-term budget involves figuring out your common expenses and cutting one or two of them out completely for a limited period of time.

Look at Past Spending

Sit down with your bank statements from the last few months and figure out your average spending in various budget categories.

Decide which expenses are essential and which could be cut out. 

Make a Plan

Now it’s time to choose one or more budget categories to get rid of.

Designate a time frame to stick to this budget (a week, a month, or longer), and come up with a plan to avoid spending money in this category. 

For example, if you’re cutting out spending on restaurants, what will you say when your friends invite you out to eat?

Can you replace that activity with something else?

6. The Penalty Budget

The penalty budget is a last resort, but if you need a kick-start to stick to your financial goals, this may be the right budget for you. 

The methodis exactly what it sounds like — if you don’t meet your financial goals and you’ll be punished. 

Set up Your Budget

To use this form of budgeting, the first step is to set up a budget of your choosing.

Make sure the goals are realistic because you’ll be paying dearly if you don’t meet them!

Pick Your Punishment

You can choose any form of ‘motivation’ (punishment) that will help you stick to your budget.

If you’re at this point, you should probably have some outside party involved to keep you accountable. 

You can choose to have a friend or partner deal out the penalty, or you can use a handy program like

Stikk will keep track of your budget goals for you and check in on you to see if you’re following your budget.

If you fail, Stikk will automatically transfer a sum of your money to a source that you have chosen (friend, grandma, or arch enemy).

So not only will you be losing money because of your bad spending habits, you’ll also be gouged extra for failing to live up to your goals!

Sounds pretty harsh, but if it motivates you to get your finances in order it may be worth it!

 Choose The Right Budget

Budgeting can be tough, so it’s important to choose the best method to increase your chances of succeeding!

With a good plan and the right tools you can drastically improve your finances and your life. 

So don’t wait another minute to start working towards financial freedom. Make a plan and start budgeting today!

How to know if you’re using the right budget. (And alternative budgeting methods that might be better.)

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