The good news is that budgeting doesn’t have to restrict you. In reality, they give you freedom, because they give you permission to spend money on the things you want to spend money on as long as you’ve already budgeted for the things you have to spend money on.

Even if you’re convinced that budgeting is a good idea, you might not be sure how to get started. After all, budgeting is all about telling your money where to go. But how can we do that if we don’t know where it should be going?

Luckily there are a few budgeting systems out there that provide guidance for aspiring budgeters to figure out where they should be spending their hard-earned money every month. 

1. 50/30/20 Budget

Do you ever struggle to figure out how much of your money should be going toward wants versus needs? Plenty of budgeting gurus today like to guilt us for spending money on lattes, but surely it’s okay to spend some of our money on things that bring us joy?

That’s where the 50/30/20 budget comes in. 

This budget breaks down exactly what percentage of your income you should be spending on wants, needs, and savings. It helps to make sure you’re putting enough money aside for bills and savings but also lets you spend money on yourself without beating yourself up about it later. 

Under the 50/30/20 budget, the first 50% of your income goes toward needs. This category includes your regular monthly bills like your rent, insurance, utilities, cell phone, and groceries. 

The next 30% of your income goes toward wants. This category is anything you don’t have to spend money on, but you want to. It includes eating out, clothes, makeup, home decor, monthly subscriptions, and any other fun or entertainment you spend money on. 

The final 20% of your income goes toward savings and debt. This category includes those pesky student loan payments we’ve all got, as well as credit cards and other debt. It also includes money going into savings. This would be your emergency fund, as well as any long-term savings goals you’re working toward like that vacation you’ve been dreaming of. 

The fact that this budgeting system is based on a percentage of income instead of a flat amount means you can easily adapt it to fit your income level. It also leaves a lot of flexibility to spend your money where it does the most for you. 

The downside of this method is that it’s not great for people with a lot of debt. Someone with a huge amount of student loan debt might be spending nearly 20% of their monthly income on debt, which doesn’t leave much room for saving. 

This method also might be challenging for people living in a region with a high cost of living. In some parts of the country, you might just not be able to get away with only spending 50% of your monthly income on needs. 

2. Envelope System

Chances are that most of us have put together a budget at some point, and then completely failed to follow it. Swiping your debit or credit card can make it easy to lose track of how much you’re actually spending. Not to mention, it’s easy to justify going just a little over budget. But that “just a little bit” adds up a lot over time. 

The envelope budgeting system is one that encourages you to use cash. At the beginning of the month, you take out the cash you’ll need for all of that month’s spending. 

Each spending category gets its own envelope for the money budgeted. And once the money is gone, it’s gone. Sure, you can pull money out of one envelope to make up for a shortfall in another. But you can only spend as much cash as you’ve got in your purse. 

A big downside to this budgeting system is that plenty of people don’t carry cash these days. There’s also a security issue with carrying cash. If you lose your debit card, you can have the bank shut it down and issue you a new one. If you lose $1,000 in cash, it’s gone.

3. Pay Yourself First

How many times have you told yourself you’d put any leftover money into your savings account at the end of the money, only to find you had spent it all by then? If you struggle to put into your savings account every month, then this budgeting trick is probably exactly what you need. 

Under the ‘pay yourself first’ budgeting method, transferring money into your savings account is the very first thing you do with your money every month. Instead of saving what you have left after spending, it requires that you only spend what you have left after saving. 

Way too many of us are neglecting our emergency fund, so now more than ever we need to start paying ourselves first.

The one challenge with this budget might come for those with an irregular income, who genuinely don’t know how much they’ll be able to put into savings each month after paying their bills.

4. Zero-Based Budget

The zero-based budget is one where every dollar gets a job. As soon as you have money come into your bank account, you tell it where to go. 

This budgeting system is great for people who tend to overspend in one or more of their spending categories. It’s easy to tell yourself that the money is there, so why not spend it?

Well, in the zero-based budget, the money isn’t there anymore because it’s already been budgeted for something else. 

The struggle with this budgeting system is that you’re only budgeting with money you already have. For people who live paycheck-to-paycheck, this can make it really difficult to plan ahead with your budget. It’s also a very hands-on type of budgeting, which is a struggle for plenty of people.

Which budgeting system is right for you?

So how do we know which budgeting system is best? In the end, the best budget for you is the budget you stick to. Take some time to experiment with the different budgeting methods to see which works best with your lifestyle. 

The other good news is that you can do a combination of these! Each of these strategies is one piece of the puzzle that you can use in combination with the others.

A no-spend month (aka a no-spend challenge) is when you commit to not spending money on certain items for an entire month. This type of challenge can be a great way to kick your bad spending habits and add a little extra buffer to your bank account. 

So how exactly do you put together a no-spend month? 

Step 1: Set some ground rules

A no-spend month looks a bit different for everyone, so figure out what exactly you will allow yourself to spend money on. After all, a no-spend month doesn’t mean you can’t spend any money at all. You still have to eat, and I’m guessing your landlord or student loan lender isn’t going to get on board with you not paying them this month. 

Usually, a no-spend month means you’ll only spend money on necessities — think rent, utilities, debt payments, food, and any other monthly bills. 

Also, decide what items you’ll replace if they run out or are damaged. Sure, you’ll probably replace your shampoo if you run out rather than just not wash your hair for the rest of the month. But what if you use the rest of your mascara? Or what if your favorite pair of jeans end up with a hole and you can’t wear them anymore?

Setting ground rules ahead of time means you won’t have to make difficult decisions throughout the month. Those rules will also make you less likely to cheat a few weeks in!

Step 2: Plan ahead 

Planning ahead is 100% necessary for a successful no-spend month. First, plan to have some safeguards in place to remind yourself not to spend. You may not even realize how second nature it is to hit that “buy now” button on Amazon. Consider logging out of all of your favorite shopping sites and apps. You might even go so far as to stop carrying your credit card, and instead, only carry a small amount of cash for emergencies. 

Other parts of planning include packing a lunch every day so you don’t eat out, and making coffee at home so you don’t impulsively grab Starbucks on the way to work. 

The final key part of planning ahead is telling your close friends and family about your no-spend month. You might feel a little embarrassed about it and worry that they’ll judge you, but chances are they’ll be totally supportive! I’ve never shared a financial goal with a friend and had them judge me.

Not only will they be able to encourage you along the way, but you’ll also be able to avoid a situation where your best friend invites you out for a happy hour and you feel guilty saying no. Heck, your no-spend month might even help your closest friends to cut their spending too.

Step 3: Find other creative ways to spend your time

A no-spend month might seem super easy…until you realize just how often you spend money. Your week might include running errands, grabbing drinks with friends, seeing a movie on Friday night, and brunching on Sunday. That’s a lot of time to fill when you aren’t spending money!

The best way to stay strong when you’re feeling the urge to brunch is to find other ways to spend your time. A great way to do this is to make plans with friends for a substitute activity. If you love grabbing dinner with friends, invite them all over for a potluck at your place. Instead of going to the movie theater, have a movie night at home with all the Netflix movies you’ve been meaning to watch. 

Your no-spend month might also be a great time to get to all of those projects you always tell yourself you’ll do, but never actually do. For example, a long time ago my mom gave me all of our old family pictures to organize into albums. I’m talking years ago. I’m embarrassed to say those pictures are still sitting in boxes. But a no-spend month would be the perfect time to tackle that task.

This is also a great time to learn a new skill! Maybe you’ve been meaning to learn to cook. Now, not only are you going to have more time on your hands, but you’ll also be eating all of your meals at home. Try checking out some YouTube videos with directions for easy recipes to help you learn your way around the kitchen. 

Step 4: Make a plan for that money

A no-spend month is super fun because, in the end, you’re going to have a bunch of money leftover that you usually would have spent on things you don’t need. You could just leave that money in your account, but you might just end up spending it all next month. 

What would be even better is to make a specific plan for that money. For instance, maybe you track all the dollars you would have spent but didn’t, and use those as an extra payment on your student loans. You could also use it to boost your emergency fund (or to start an emergency fund if you don’t already have one). Finally, you could use that money as a reward and put it away for a vacation.

Step 5: Create new spending habits for yourself

Once your no-spend month is over, it can be so easy to fall back into your old spending habits. But now that you’ve paused them for a month, it’s the perfect time to create new and better spending habits for yourself. 

Maybe this month taught you that you actually don’t mind bringing lunch to work every day. Even if you allow yourself to go back to eating lunch out one or two times per week, you could still be saving yourself a couple of hundred dollars per month. 

Or perhaps your no-spend month forced you to really revisit the clothes you already had in your closet, and it turns out there were a ton of pieces that you love but just totally forgot about. You realize that you don’t need to be buying as many new clothes as you used to.

You may have seen other benefits from your no-spend month that make you want to change your habits. If you normally go out a lot but didn’t during your no-spend month, you might find that your body feels a lot better since you’ve been cooking at home and drinking less. 

That’s the great thing about a no-spend month. Not only do you see financial benefits during that one month, but it can act as the jump-start you needed to help you change your habits for good!