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What's the Best Budget for Your Lifestyle?

Creating a budget is one of the first steps in the journey to financial flexibility and freedom. A budget helps ensure you can cover your monthly expenses while working toward exciting dreams like buying a home or starting a family.

Everyone can benefit from creating a budget. But, budgeting isn't a one size fits all solution. While there are many different methods to choose from, the key is to find one that fits your lifestyle and financial goals.

Check out the budgeting methods below to see which one might be best for you!

Zero-Based Budgeting

With zero-based budgeting, the goal is that your income minus your expenses equal zero by the end of the month. This means assigning all of your monthly income to categories including expenses, debt payments and savings. By giving every dollar a purpose, it's a lot easier to keep track of where your money is going and meet your savings goals.

If you find that you're going over budget, review your spending to see where you can make cuts. If you come in under budget and have money left over, that's a bonus! You can add the money to next month's budget or use it to boost another savings category, like your emergency fund. 

The 50-30-20 Method

The 50-30-20 method is a good budgeting system to try if you want to reach specific savings goals without giving up the things you love. Here's how it works:

  • 50% of your income is for essentials. This includes groceries, rent or mortgage payments, minimum debt payments, insurance, health care and utilities.
  • 30% is for non-essentials. This is for fun spending, like cable or streaming services, gym memberships, new clothes and dining out.
  • 20% is for savings. You could also use this category to make debt payments beyond the minimum.

It may seem like spending 30% of your income on “wants" is a lot. But when you think about it, those little expenses can add up. Plus, if your budget is too restrictive, it can be harder to stick with it! The 50-30-20 budget helps you meet your monthly expenses and savings goals while still leaving some realistic room for fun.

Reverse Budgeting (Pay Yourself First)

If you want to focus on saving while taking a more hands-off approach to money management, try reverse budgeting. With this strategy, you build your spending plan around your personal savings goals. When you receive your paycheck, the very first thing you do is set aside a percentage for savings. Then, you're free to use the rest of your money on necessary expenses as well as fun spending. Make it easier to “pay yourself first" by scheduling automatic transfers into your savings account.

Budgeting Tools

There are many tools you can use to put your budgeting plan into action.

The Envelope System

With the envelope system, you label envelopes with spending categories, then put the money you plan to spend on those things into the envelopes. When an envelope is empty, you've reached your spending limit for the month in that category.

You don't have to use cash to use the envelope system. One alternative is to set up additional Wright-Patt Credit Union (WPCU) sub-savings or checking accounts. You can open as many as needed to fit your budgeting goals. Once you have set up additional accounts, simply fund them by making transfers from your main account. WPCU's Mobile and Online Banking services make it easy!

Digital Budgeting​

If you want to manage your money on the go, try using a digital budgeting tool, app, or monthly budget calculator to maintain your budget. One free, easy-to-use online budgeting tool is WPCU's Money Management, available through Mobile and Online Banking. Check out this interactive demo to learn more. WPCU also offers an Ever-Fi Budget Calculator, simply enter in monthly income and your expenses to identify opportunities to save.

Budgeting Notebooks or Spreadsheets

WPCU also offers a free budgeting spreadsheet you can download and customize with your personal expenses. If you'd rather skip the technology, you can always track your expenses with pen and paper.

If the first budgeting method you try doesn't feel right, don't get discouraged. There's nothing wrong with experimenting until you find the budget that's right for you. Keep going — you've got this!​