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5 Creative Budgeting Methods for When Money is Tight



Adds up to big savings

If you’re like me, you need to keep a close eye on what you’re spending at all times. That means doing something I don’t often do… budget.

Budgeting is the gift that keeps on giving and there are a ton of great tips and tricks out there for how to do it successfully. I was looking for some creative methods that were a bit more outside-the-box, unique solutions for this very unusual time.

I found five unique budgeting methods to try –perhaps one of these methods will inspire you to take a different approach to your money, or at least make managing your budget a bit more fun.

Download Moola to help you budget better


Budgeting Method #1: The 70% Rule

percentage based budgeting and budgeting methods


Source: Fun Cheap or Free

Jill is a mom of five (yes, five children) and a finance connoisseur who is redefining what it means to be frugal.

Also, she’s super funny.

This is a budgeting method she swears by and it really does make a lot of sense.

What is the 70% rule?

The 70% rule is a percentage-based budgeting method that breaks down your monthly income in to 70% / 20% / 10% in order to help you save.

How does the 70% rule work?

Similar to other percentage-based budgeting methods, the 70% rule encourages you to think of your income as percentages and to spend within them. The breakdown is as follows:

  • 70% spend: 70% of your monthly income goes towards your expenses. This includes necessities such as:
    • Rent
    • Car payments
    • Groceries
    • Bills
    • Movie tickets
    • Restaurants
    • Clothes
  • 20% save: You shouldn’t even touch this 20%. This is meant to go directly into your savings account, never to be seen in your checking account again. It may be helpful to auto deposit 20% of each paycheck into your savings account so you’re not tempted to spend it.
  • 10% invest: This could be retirement savings, 401K, or other investments. The idea is to always be contributing to something that will help you later on, or to make your money work for you.

Who is the 70% rule for?

This method is best for people who want to save, but don’t want to spend a ton of time thinking about budgeting each month. It requires a bit of math and calculating at the beginning of each month, but most budget methods do.

You can further track your 70% spending category, but you don’t have to. The point of this budgeting method is to simplify the process so that you don’t have to write a million things down.

Why do we like this budgeting method?

It’s an easy to understand method that’s manageable and doesn’t require a lot of time or energy. It also offers some flexibility. If you can’t set aside 30% of your income right now, that’s okay. Do as much as you can, but make sure you’re always putting something into savings. This ensures you’re always moving towards your savings goals.


Budgeting Method #2: Budget by Paycheck

What is Budget by Paycheck?

The Budget-by-Paycheck budgeting method prioritizes budgeting paycheck by paycheck (e.g. biweekly) using a visual tool (calendar) to track your income and expenses.

How does Budget by Paycheck work?

Budgeting by paycheck is a bit more involved compared to the 70% rule, but it’s still very doable. Follow the steps below for a seamless paycheck budgeting experience:

  • Create a budget calendar and organize your paychecks, expenses, and extra money by colour: Mark on the calendar the day(s) you get paid and the days you have to pay your bills. Then, assign each bill a paycheck – if you get paid twice a month, then half of your bills will be paid with one paycheck, half will get paid with the other paycheck. You can colour code your bills accordingly on your calendar.
  • Subtract your bills from your income: Whatever you have left after paying your bills is for everything else in your life. This includes groceries, gas, pet expenses, beauty products, etc.
  • Give your extra money a “job” so that your income – expenses = $0: This job isn’t just groceries or clothes. It’s also your savings, debt repayments, and fun money. You should have $0 left over at the end of each month.

There’s a lot more to this method including tracking your spending, highlighting like purchases in the same colour, and creating a debt repayment plan if it applies to you. It’s a comprehensive financial plan that can be super helpful for those who need it.

Who is Budget by Paycheck for?

This method is best for people who need more structure to their budget and do well with visual tools. It also works great for people who spend mindlessly, because it encourages giving every dollar a job.

It does require a bit more planning on your part, but if you’re into that, it’s a really good way to take control of your money.

Why do we like this budgeting method?

Most of us don’t get paid once a month, so it’s logical to divide your expenses up paycheck by paycheck as opposed to month by month.

Thinking of your budget in terms of each paycheck can also prevent that feeling you get when you realize you have a bill due tomorrow, but you don’t get paid until next week.

Source: The Budget Mom


Budgeting Method #3: Gift-Card Budgeting

gift card budgeting and budgeting methods

We definitely didn’t invent gift-card budgeting, but we sure love talking about it. It’s the only budgeting method that gives you free money for doing nothing.

What is Gift Card Budgeting?

Gift-card budgeting is a method of managing your money by dividing your spending into categories, and then only loading the amount you want to spend in that category onto a gift card on your phone.

How does Gift Card Budgeting work?

If you’ve ever heard of, or tried, envelope budgeting, then you’re already halfway there. Gift-card budgeting operates on the same principles; just done a bit differently:

  • Determine how much you want to spend and save each month: This involves a bit of tracking of your inputs and outputs i.e. how much you’re making and what your savings goals are.
  • Divide your spending into different categories: So, you have $1,000 each month to spend. Great! Divide that into categories, like $400 for groceries, $200 for dining out, and $150 for clothes.
  • Buy a gift card in each category for the amount you want to spend: Take your $400 grocery budget and buy a $400 gift card to No Frills. Take your $200 dining out budget and buy a gift card to The Ultimate Dining Card, so on and so forth.
  • Collect deals and bonuses along the way: Here’s the best part – when you buy your gift cards with Moola, you’ll get deals and bonuses on the cards you buy. All of a sudden, your $200 dining out budget becomes $220, just for using gift cards.
  • Track your balance as you go: Use the app to track your balance as you go. When it hits $0, you’re all done. No more spending for you in that category for the rest of the month.

Who is Gift Card Budgeting for?

Gift-card budgeting with Moola is best for people who want a simple budgeting method that is like cash envelope budgeting, but better. By having all your gift cards on your phone, you’ll always have them with you. You can even check your balance so you’re always on top of how much you have left.

Why do we like this budgeting method?

Gift card budgeting is a really good method for visual people who like reminders of how much they have to spend. Every time you make a purchase in a category, you’ll see exactly how much you have left to spend within that category.

It’s also super cool because you can get more money just by doing some planning before-hand and buying gift cards for the places you’re already shopping. Deals and bonuses on gift cards are the real money savers here.

Ready to save? Download Moola to score some sweet deals (P.S. you’ll be supporting local businesses during Coronavirus when you do!)


Budgeting Method #4: You Need a Budget (YNAB)

You need a budget and budgeting methods

It was YNAB’s cult following on reddit that made me really wonder what it was all about.

What is You Need a Budget?

YNAB is a budgeting software system that includes a “proven method”, partner budgeting, goal tracking, reports, personal support, and secure data.

How does You Need a Budget work?

The YNAB software system is designed to teach you how to budget, including the four rules of budgeting:

  1. Give every dollar a job: Just like the budget-by-paycheck method, YNAB emphasizes giving every dollar a job, so that your input minus your output always equals $0.
  2. Embrace your true expenses: This rule focuses on breaking down those large expenses (like an annual car insurance payment) in to smaller, more manageable amounts spread out over weeks or months.
  3. Roll with the punches: Keep you budget flexible and malleable. When plans change, change your plan and keep things moving forward.
  4. Age your money: This rule is about planning for the future, not scrambling for today. The idea is you should be able to not cash your paycheck for months and still be okay.

The YNAB system also offers lots of support, so that you’re better able to budget yourself. The idea is to teach you to budget so that you no longer need the software.

It’s like budgeting boot camp with an endless amount of knowledge to be gained.

Who is You Need a Budget for?

YNAB is a more sophisticated budget more catered to those who aren’t living paycheck to paycheck. The service  costs $11.99/month or $84/year USD, which may be too cost prohibitive for some people That could be significant for someone who is, you know, trying to save money. I guess the best thing to do is to think of it as an investment in yourself.

Why do we like this budgeting method?

YNAB gives you the tools to be successful at budgeting on your own. With this well-known software, you’re also entering into a community of like-minded people, with lots of people offering their tips and tricks on how to succeed with YNAB.

They also offer workshops to further support you on your YNAB journey.


Budgeting Method #5: Kakeibo

journal and budgeting methods and planning

This is less of a budgeting method and more of a money philosophy. Full disclosure, it’s my number one favorite way to look at money.

What is Kakaeibo?

Kakeibo is a Japanese style of budgeting that focuses on being mindful of your spending, evaluating what you really need, and the reasons why you buy the things that you do.

It emphasizes mindfulness and always having an intention with your purchases.

How does Kakeibo work?

There are three main components to kakeibo:

  1. Write down everything you buy: No, excel doesn’t count. You need to physically put pen to paper to get the most out of this method. When we write things down on paper, we’re a lot more mindful of what we’re doing, as opposed to just typing it in to a computer.
  2. Organize everything you buy according:
  • Needs — things you can’t live without like food and toiletries
  • Wants —things you don’t need such as dining out or a new jacket
  • Culture —things such as going to the movies or a museum
  • Unexpected —things you didn’t anticipate such as a  a parking ticket or replacing a broken lamp
  1. Ask yourself 4 questions while you budget: Reflecting on your spending regularly is what makes kakeibo so powerful. The four questions are:
    • How much money do I have available?
    • How much would I like to save?
    • How much am I spending?
    • How can I improve?

Who is Kakeibo for?

The power of kakeibo lies in its simplicity and emphasis on reflection – you’ll get out of it what you put into it. This method is best for those who don’t like a lot of structure and who already has a decent handle on how to manage their money.

Why do we like this budgeting method?

Kakeibo puts you in touch with your money in a really unique way. This method doesn’t try to control your spending as much as it aims to make you more aware of it.

By being more mindful of your spending habits, you’ll naturally start to spend less on the things you don’t need.

What We Learned About Budgeting Methods

We’ve learned that there’s not right way to budget, only the way that’s best for you.

If you’re tired of the traditional budgeting methods, try one of these 5 unique ways of managing your money instead.

At the end of the day, it’s all about experimenting until you find the way that best helps you reach your financial goals.

Download Moola to help you save money!

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