“Mastering Your Money: Three Budgeting Methods That Transformed My Finances”

Daily writing prompt

Write about your approach to budgeting.

Three Approaches to Budgeting That Changed My Financial Mindset

Today, I want to share the three best approaches to budgeting that have helped me along my financial journey. Before I go any further, let me be clear—I am not a financial advisor. Everything I’ve learned has come from researching, reading financial books, and soaking up knowledge from YouTube experts. My goal is to highlight the budgeting strategies that have worked for me because, ultimately, budgeting should align with your financial goals and lifestyle.

1. The 50/30/20 Budgeting Rule

If you’re a beginner, the 50/30/20 rule is a great starting point because it provides a well-balanced approach to money management. Let’s break it down:

50% – Needs: I like to call this the “essentials” category—rent or mortgage, food, utilities, and insurance. These are non-negotiables, the things you truly can’t live without.
30% – Wants: This is for hobbies (like running this blog), entertainment (movies, dining out), and yes…shoes (I have a bit of a problem).
20% – Savings & Investments: This took me years to fully grasp, but it’s crucial. You always hear about emergency funds, and trust me, they matter (I aim to have at least three to five months of expenses saved). However, what often gets overlooked is investing. Learning about compound interest was the push I needed to start my investment journey, and I highly encourage you to explore it too.

2. Zero-Based Budgeting

I didn’t truly understand my spending habits until I implemented zero-based budgeting. This method forced me to track where every dollar was going. To this day, I use a medium-sized calendar where I write down every transaction, interest rate, and expense for each day of the year.

The biggest eye-opener? Seeing how much money I was giving away to credit card interest rates. Once I became aware of this, I made more mindful spending choices. Two key principles helped me stay disciplined:

Assign every dollar a job – If I have leftover money in my “Wants” category, I redirect it toward my savings, investments, or even an extra house payment.
Create spending categories – This structure ensures that no dollar is left unaccounted for. Yes, it takes effort, but trust me, it’s worth it.

3. Envelope (Cash-Based) Spending

Let’s be real—if you struggle with overspending, strategies #1 and #2 won’t work until you gain control over your spending habits. That’s where the envelope method saved me.

I assigned physical envelopes to different spending categories (e.g., food, gas, fun). Once an envelope was empty, that was it—no more spending in that category until the next month. This system forced me to be consciously aware of how much I had left to spend, and it helped me build better financial discipline.

I want to emphasize once again—I am not a financial advisor, but I’ve gained a wealth of knowledge over the years when it comes to budgeting and saving. These three approaches have brought me closer to financial freedom, and I hope they can help you too.

I’ll leave you with this thought:
“The art of living easily as to money is to pitch your scale of living one degree below your means.” — Sir Henry Taylor

Now, I’d love to hear from you! What budgeting strategies have worked (or not worked) for you? Have you hit any roadblocks? What would you add to this list? Let’s discuss!

C. "BIGGIE" SMALLS