Your present financial state and goals can give you a clue. Once you know where you stand and what you hope to accomplish, pick an option that matches those needs. If you don’t know which route to take, do a financial self-assessment to find the one that best fits your needs.

The 50/30/20 budget

It splits your income across three major categories: 50% goes to necessities, 30% to wants and 20% to savings and debt repayment.

  • You can use it as a baseline for other flexible budgeting methods and as a guide for building your own.

Compare manual and digital budgeting options

Determine whether you want to take a DIY approach to budgeting or seek technological assistance

  • Personal finance software can be convenient if the app or program lets you automate savings or access and update your information on the go.
  • For some, a hands-on approach like with pen and paper is best.

Still not sure which budget system is best for you?

There’s no need to follow a specific budgeting system as long as you’re aware of important details

  • If you live within your means and know you’re on track to reach your goals, then tracking every penny is probably overkill

How much you have for:

Necessities

  • Wants
  • Saving and paying off debt
  • NerdWallet tallies up your expenses and shows you how much you’re spending on things like food, bills, travel, etc.
  • Make the most of every dollar: The zero-based budget
  • Use your monthly income and use every dollar in a deliberate way until there are zero dollars left
  • Curb your spending: The envelope system
  • Build up your savings: Pay yourself first
  • A “reverse” budget puts savings before immediate expenses

Decide how much effort you’re willing to devote

How often should you budget?

  • If you’re confident with your financial state, you can probably get away with reviewing your information once a month or a couple of times a year.
  • Those who are still figuring out how to handle their money should check in weekly or after every purchase.

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