When it Comes to Budgeting, One Size Won't Fit All

Like learning yoga or taking up an instrument, budgeting is a practice, and it requires patience, follow through and a fair amount of trial and error. 

If you struggle with budgeting, it might be because your budget doesn’t fit your needs. 

When it comes to budgeting, it’s not a one-size-fits-all scenario – there’s a lot to consider to make sure you’re getting what you need out of your budget. 

Tally spoke to Kari Lorz, certified financial instructor and founder of Money for the Mamas to learn more about personalized budgeting. With her insight, you’ll learn what you should consider before starting a budget, how to customize it and finally, how to determine if it’s working.

Why doesn’t one form of budgeting work for everyone?

“One form of budgeting absolutely does not work for everyone because everybody has their own unique strengths and weaknesses,” explained Lorz.  

For better or worse, habits can be hard to change. When people start budgeting, said Lorz, they’re often told by peers, “this is the best type of budget.” When they try and fail at that specific method, it’s discouraging. 

“They get so mad at themselves,” Lorz said, “and it’s that scarcity mentality that keeps them down and keeps them from trying again.”

Different types of personal budgets will work for different people. What may be perfect for someone might not be the best for somebody else.

Types of personal budgets

“When it comes to budgeting, there is no reason whatsoever for people to reinvent the wheel or go at it on their own,” Lorz explained. Instead of starting with a blank sheet, try one of these budgeting types. 

Pen and paper

When it comes to different types of budgets, this method is a classic. With pen and paper budgeting, you track spending in a journal or notepad. Start with monthly recurring expenses, such as:

• Debt repayment

• Rent or mortgage

• Subscriptions

• Phone bills

Balance these recurring expenses against your income. Then, use the surplus for everyday purchasing, noting each transaction and balancing it against your remaining.

Pen and paper can be helpful because it requires you to write down every purchase you make. For some, that might make them think twice before purchasing. 

80/20 budget

The 80/20 budget focuses on two categories: 

• Spending money

• Savings

Budgeters set aside 20% of their income on payday to immediately head to savings. How they spend the remaining 80% is up to them. 

The 80/20 budget exemplifies the rule of “paying yourself first,” or prioritizing putting money away in savings no matter what. 

50/30/20 budget

The 50/30/20 rule adds a wrinkle to the budget above. In this method, income spending breaks down as follows:

• 50% to cover needs

• 30% to cover wants

• 20% to cover debt repayment, savings or retirement

This structure might be the right fit for someone looking for a bit of structure in their budget, without the rigidity of tracking every detail. 

Zero-based budget

The zero-based budget or EveryDollar budget gives every dollar entering a bank account a job. As the money flows in, budgeters “assign” it somewhere, whether that’s towards rent or a predetermined dining out budget. 

The goal is to reach “zero,” meaning no money is left unassigned. While this could sound scary at first, it’s designed to help you make a habit of saving money and paying yourself first. In this type of budget, you’ll have a good idea of exactly where your money is going. 

Budget by paycheck

For those who get paid every other week, Lorz suggests a hybrid model, like budgeting by paycheck.

“Instead of a monthly budget, you budget for every two weeks that you get paid. So some bills get paid from the first two weeks' budget and some bills get paid from the last two weeks' budget,” Lorz said.

This can be good for budgeters who get overwhelmed with end-of-month bills or enjoy breaking large payments into smaller portions.  

Budget and personality

Different types of budgets will lend themselves to different types of people. Many of us have tried habits or routines that just didn’t stick and budgeting is no different.  

When adopting a budget, think about how it might play into your personality, suggested Lorz. For example, a spontaneous person isn’t going to thrive on a strict, zero-based budget. 

“They’ll just get frustrated and quit. But, if they decide to do a budget with a little more wiggle room, like a 50/30/20, they may not feel so restricted,” said Lorz. 

Similarly, your struggle to commit to budgeting might not be because of the type of budgeting but the way you’re tracking it, Lorz explained. 

“The creatively inclined might enjoy following their budget with a bullet journal because with a bullet journal, you can be very creative. They may not do so well with a spreadsheet budget,” she commented. 

On the flip side, someone who loves data may enjoy a detailed spreadsheet or customizable app. 

No matter the budget you adopt, it should feel like a choice, not a restriction. 

How can you tell a budget is working? 

It’s hard to tell right away if a budget is a good fit. Adopting any habit takes time, and anyone will encounter setbacks and wins as they learn. 

Lorz advised budgeters should give themselves at least three months with a budgeting method before deciding if it’s best for them:

“Three months is a great time frame for somebody to test out a specific budgeting method. One of the things that you find out when people start to budget is they forget things like their HOA dues or an Amazon subscription. So all these little things keep popping into their budget and they don't realize it.”

Those three months can expose expenses you forgot about, and the time can also help you tweak and adjust the new habit. 

However, if three months go by and you’re still struggling to make a budget work, it may be time to try something new, and that’s normal too. 

“Nobody gets budgeting right the first time,” reminded Lorz. 

If credit card debt repayment is a part of your new budget, consider checking out Tally†. Tally is a credit card debt repayment tool that offers a lower-interest line of credit to qualifying users. Tally can help you pay down debt quickly and efficiently, meaning more space in your budget for reaching those financial goals. 

​​†To get the benefits of a Tally line of credit, you must qualify for and accept a Tally line of credit. The APR (which is the same as your interest rate) will be between 7.90% and 29.99% per year and will be based on your credit history. The APR will vary with the market based on the Prime Rate. Annual fees range from $0 - $300.