What’s the Best Type of Budget to Help You Save More Money?

Managing your finances doesn’t have to mean following a rigid, one-size-fits-all system.

The key to successful budgeting is finding an approach that matches your lifestyle, personality, and financial goals.

Here are six popular budget types that can help you save more money and take control of your finances:

The 50/30/20 rule divides your after-tax income into three categories:

This method is ideal for beginners because it’s simple to understand and provides some flexibility within each category.

With zero-based budgeting, you assign every dollar of your income a specific job until you reach zero. This doesn’t mean spending everything—it simply means you intentionally direct money toward expenses, savings, and investments.

For example, if you earn $4,000 monthly, you allocate exactly $4,000 across all categories, ensuring nothing slips through the cracks.

This method requires more time and attention but offers maximum control over your spending. It works well for people who want to eliminate wasteful spending and maximize their savings potential.

Cash stuffing, sometimes known as the envelope method, is a cash-based system where you divide money into physical envelopes labeled for different spending categories. Once an envelope is empty, you stop spending in that category until next month.

For example, if you allotted $100 to dining out, you would put $100 in an envelope marked “Dining Out,” and when the money is gone, you don’t spend any more on restaurants until the following month.

The traditional approach to cash stuffing uses actual cash in envelopes, but modern versions might use digital apps that simulate the envelope concept.

This tactile method creates a psychological awareness of spending that may be difficult to accomplish when using credit cards or a digital wallet. That makes it a good choice for people who struggle with overspending.

This approach prioritizes savings by automatically setting aside money for savings and investments before you pay any other expenses. Tools like automated recurring deposits can simplify the process.

You determine your savings goal, such as 15% or 20% of your income, and transfer that amount to savings accounts or investment vehicles as soon as you get paid. The remaining money covers your living expenses and discretionary spending.

This method works for goal-oriented savers who want to ensure their future financial security isn’t compromised by present spending.

This is a simpler version of the 50/30/20 rule. With the 80/20 budget, you allocate 20% of your income to savings and debt repayment, and the remaining 80% covers everything else without strict categories.

This approach offers maximum flexibility and requires minimal tracking, making it ideal for people who find detailed budgeting overwhelming or those with irregular income.

While it’s less precise, it still establishes the critical habit of consistent saving.

Rather than focusing on rigid percentages or categories, values-based budgeting aligns your spending with your personal values and long-term goals. You identify what truly matters to you—whether that’s a charity, travel, education, health, or financial independence—and allocate more money toward those priorities while cutting back on things that don’t align with your values. It’s a way of planning for and committing to responsible spending.

This is a more introspective approach that can help you create a more meaningful relationship with money.

If it’s the right fit, values-based budgeting may lead to greater satisfaction and a natural reduction in spending in areas that don’t serve your goals.

The best budget is the one you’ll actually stick with. Consider starting with a simpler method like the 80/20 or 50/30/20 budget, then adjust to one that’s more holistic, such as a values-based budget, as you become more comfortable with tracking your finances.

By committing to a budget and incorporating savings, you can build habits that will help you meet goals and stay on track in any economic environment.

Keep in mind that budgets aren’t meant to restrict you. They’re tools to help you spend intentionally and save effectively toward the life you want to build.

Disclaimer: This article is for general information and education only. It should not be considered financial or tax advice.