As a personal finance writer, I write about budgeting on a daily basis.
That’s why it was a bitter truth when I realized that I really couldn’t manage my own budget. It wasn’t that I didn’t know how to budget or where to start – it just seemed like I had tried every method out there and none of them worked for me or my family.
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My husband and I downloaded every budgeting app available and tried other popular methods like the 50/30/20 budget. Nothing seemed to give us a real picture of where our money was going. Each time it was easier to just give up.
Fortunately, we understood this. And at the same time, we learned what the problem was: none of the “traditional” budget methods were built for families like ours, consisting of two full-time freelancers.
We had no choice but to get creative.
Let’s take a look at a few less common budgeting methods in the hope that one of them will finally work for you.
1. Kakeibo Method
As you can guess from the name, Kakeibo is a Japanese budgeting method. Translated, Kakeibo means “household financial ledger,” and that’s where the method focuses: creating a physical financial journal for budgeting.
Just like regular journaling, budget journaling keeps you accountable for your financial goals. Plus, using pen and paper might just be more fun. Once you have a journal that you want to use, start tracking the following:
- your monthly income.
- Your savings goals.
- Your categories of expenses.
Once you know these numbers and categories, subtract your expenses from your income and set aside some money for every savings goal you have.
To keep yourself accountable, you should always evaluate your spending and savings each month by asking these four questions:
- How much money do you have?
- How much money would you like to save?
- How much money are you spending?
- How can you improve?
Read more: Kakeibo: Japanese Budget Method Explained
2. Reverse budgeting
If you’ve been trying to rethink your budget and prioritize savings, the reverse budgeting method is the perfect place to start. As with any budget, you will start by adding up your income. However, instead of deducting your current expenses, you save money for whatever savings goals and investments you have in the first place.
Then set aside money to pay bills and debts. Whatever is left can be spent on fun money.
Read more: Pay Yourself First: How to Save More Money the Easy Way
3. Weekly budgets
For those who have irregular income or struggle to keep up with a monthly budget, a weekly budget can help you plan more realistically where your money is going.
As a freelancer, I’m a big fan of this budget-friendly method. Each of my clients pays me on a different day of the month, and the amount varies from month to month. Splitting my money each week helps keep my expenses manageable.
Read more: Need help with your budget? Try Weekly Budget
4. Cost-income approach
“Traditional” budgets focus on how much of your income is needed to cover your expenses. The expense-income approach reverses this and forces you to focus on making more money instead of cutting your expenses.
If you’re already at your limit and can’t cut spending anymore (or just don’t want to cut spending anymore), the cost-income approach makes sense.
First of all, you will start by listing your expenses. Include items such as:
- Mortgage.
- Utilities.
- Cellular telephone.
- Food.
- Insurance.
- Car payments.
- Duty.
- Savings goals.
Calculate how much each one costs. The total is the base income you need to achieve. Let’s say all these expenses cost you $3,000 a month. If you’re only making $2,300 a month, you’ll need to find an extra $700 to afford the expenses.
Yes, this is easier said than done, but we have some ideas for you, as well as a few other ways to make extra money.
5. Off-budget budgeting
Just because you can’t bring yourself to stick to any budget doesn’t necessarily mean you’re recklessly managing your money. No budget is an option. Well, sort of.
The “no budget” method assumes that you sit down at the beginning of the month and pay all your bills in one go. You can even automate the process so you don’t really have to do anything.
Once you’ve done that, set aside the money in a savings account for your purposes and put some of it in debt. Again, you can even automate this process (just make sure you have enough money to cover those automatic withdrawals).
6. Envelope method
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For those who are afraid to include technology in their budget, the classic envelope method may be the best way to manage their money.
With this budgeting method, you are going to take cash and split it between different envelopes, each representing a category of spending or savings in your budget.
How to succeed with this method? Resist the temptation to remove the top of another envelope unless you are willing to sacrifice certain areas of your budget. Once the envelope is empty, that’s it! You will need to wait until you get paid again or plan your money to spend more in this category.
Read more: How to Make the Envelope Method the Best Budgeting Method
7. Salary Method
The salary method is somewhat similar to the weekly budget method. You will create a base budget every time you receive a paycheck. If you get paid every two weeks, you will be planning all your money every two weeks. This can help break down your budget into manageable chunks instead of figuring out where everything is going at the start of the month.
The salary method is a form of zero-based budgeting, meaning you will give every dollar you earn (after taxes) to work. This will include your recurring bills, debts, savings, and money for fun and outings.
8. Sinking funds
Sinking funds are amounts of money you set aside each month, usually in separate savings accounts, to pay for occasional expenses. You may have depreciation funds for your family’s annual leave, for your car registration, for any unexpected medical expenses, or for any expenses you expect to need money for in the future.
If you set aside small amounts each month, you’ll have the money when you need it, and you won’t have to break your regular monthly (or weekly) budget due to unexpected expenses.
Read more: Sinking Funds: Budgeting’s Ultimate Secret
9. Spreadsheets
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With so many budgeting apps on the market, it’s easy to overlook the humble spreadsheet when creating a budget. However, the reality is that spreadsheets can be powerful budgeting tools when used correctly.
The easiest way to start budgeting with a spreadsheet is to download a budget template, such as the free MU30 Monthly Budget Spreadsheet. From there, you can make adjustments based on your financial needs and priorities.
The biggest downside to using a spreadsheet to track your money is the lack of automation. At the same time, for those who want or need to contribute as much as possible to their budget, manually tracking your budget can help you get a better idea of your real financial picture.
10. Combined budget
There is no rule that you cannot combine multiple budgets into one that suits you. If you want to use the envelope method for certain expenses to avoid overspending, and the reverse budgeting method to force yourself to prioritize savings, do so.
Budgeting is surprisingly personal. How you do it doesn’t really matter as long as it helps you feel more comfortable with your money. My budgeting method is a hybrid of the envelope method and the good old spreadsheet, plus a few invested funds to pay off.
Summary
Budgeting is much more than just YNAB or the 50/30/20 method (although these are great methods for some).
If you’ve already given up on new budgeting methods, take the time to consider some of the options above. They take a unique approach to saving and budgeting and make you look at your money differently.
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