Are you struggling to manage your money, save more, and break free from living paycheck to paycheck? Choosing the right budgeting method can help you take control of your finances, build savings, and achieve financial freedom according to your goals. It's working for me.
Two of the most popular budgeting strategies are Zero-Based Budgeting and the 50/30/20 Rule. But which one is better? In this guide, we’ll break down how each method works, compare their pros and cons, and introduce other budgeting techniques to help you find the best fit.
💡 My husband and I personally use Zero-Based Budgeting because it ensures that every dollar has a job—helping us stay on track with our savings and financial goals.
What is Zero-Based Budgeting ?
Zero-Based Budgeting is a highly detailed budgeting method where every dollar you earn is assigned to a category—whether it's bills, savings, debt payments, or investments—so that your budget balances to zero at the end of the month.
How Zero-Based Budgeting Works:
1️⃣ Calculate Your Total Income – Add up all sources of income (salary, side hustle, freelance work, etc.).
2️⃣ List All Expenses – Include fixed costs (rent, utilities, insurance) and variable costs (groceries, entertainment, gas, etc.).
3️⃣ Assign Every Dollar a Job – Distribute your income across expenses, savings, and debt payments until your balance is $0.
4️⃣ Track & Adjust Weekly – Review spending and adjust categories if needed.
Zero-Based Budgeting Pros & Cons
✅ Pros:
✔️ Every dollar is accounted for – No wasted money.
✔️ Great for debt payoff & saving goals – Prioritizes financial success.
✔️ Helps with overspending – Forces accountability.
❌ Cons:
❌ Requires detailed tracking – Takes effort and time to update regularly.
❌ Time-consuming at first – But gets easier with practice.
What is the 50/30/20 Rule?
50/30/20 Budgeting Rule is a simple money management strategy that divides your income into three categories:
50% Needs – Rent, mortgage, utilities, insurance, groceries, minimum debt payments.
30% Wants – Restaurants, entertainment, subscriptions, hobbies.
20% Savings & Debt Payoff – Emergency fund, retirement contributions, extra loan payments.
50/30/20 Budgeting Pros & Cons
✅ Pros:
✔️ Simple & easy to follow – No need for detailed tracking.
✔️ Provides financial balance – Ensures you enjoy life while saving.
✔️ Great for beginners – No complicated calculations.
❌ Cons:
❌ May not work for all income levels – Rent alone may exceed 50% of income in high-cost areas.
❌ Lacks detailed tracking – Doesn’t pinpoint where every dollar goes.
Other Popular Budgeting Methods
If you don't like Zero-Based Budgeting nor the 50/30/20 Rule, here are other budgeting methods that could work ( I had to research these for myself because I hadn't heard some of these before):
📌 The Envelope System (Cash-Only Budgeting)
✔️ Ideal for those who overspend using debit/credit cards.
✔️ Uses cash envelopes for each spending category.
✔️ Once an envelope is empty, you stop spending.
📌 The Pay-Yourself-First Budget (Automated Savings)
✔️ Prioritizes savings before spending on anything else.
✔️ Great for people who struggle with building savings.
✔️ Ensures financial security before discretionary spending.
📌 The 80/20 Budget (Minimalist Budgeting)
✔️ 80% of income covers expenses & fun money.
✔️ 20% goes directly into savings & investments.
✔️ Super simple – No category breakdowns needed.
📌 The Reverse Budget (Spending What’s Left)
✔️ You set a savings goal first and spend what’s left.
✔️ Helps aggressive savers build wealth faster.
✔️ Great for those who don’t want detailed tracking.
Which Budgeting Method is Best?
The best budgeting method depends on your income, lifestyle, and financial goals. What are you trying to get out of budgeting? What is your reason for budgeting?
✔️ Choose Zero-Based Budgeting if:
✅ You want full control over every dollar.
✅ You have specific savings or debt payoff goals.
✅ You’re willing to track every expense.
✔️ Choose the 50/30/20 Rule if:
✅ You want a simple and flexible approach.
✅ You don’t like tracking every dollar.
✅ You have balanced expenses that fit within the 50/30/20 breakdown.
✔️ Try Other Methods if:
✅ You love cash-only budgeting (Envelope System).
✅ You want to prioritize savings first (Pay-Yourself-First).
✅ You want a simple, hands-off approach (80/20 Budget).
Why My Husband and I use Zero-Based Budgeting
When my husband and I started focusing on paying off debt, saving for a home, and growing our finances, we needed a budgeting method that gave us full control over every dollar.
💡 Zero-Based Budgeting works best for us because:
✅ It ensures that every dollar has a job (no money left unaccounted for).
✅ It helps us hit our savings goals faster by tracking where every dollar goes.
✅ It prevents overspending by forcing us to allocate every penny intentionally. (when we actually follow the budget🫢)
If you want to take control of your finances, save more money, and pay off debt faster, I highly recommend trying Zero-Based Budgeting!
⭐️COMMON MYTH: YOU HAVE TO HAVE $0 IN YOUR ACCOUNT AFTER BEING PAID
I think the best way to figure out what works for you is trial and error.
The Point: Budget Your Way to Financial Freedom
No matter which method you choose, the key to financial success is consistency.
📌 Want more budgeting tips? Subscribe to my blog for weekly financial advice, and check out my YouTube channel where I break down real-life budgets, savings challenges, and debt payoff strategies!
💬 Which budgeting method do you use? Drop a comment below and let’s discuss!
🔗 Need a budget tracker? Get my printable budgeting worksheets to help you track every dollar!