I am a firm believer that there is no one right way to manage money.
We’re all in different stages of our life and we all have different personal preferences. What works for me might not work for you and vice-versa. That’s the way it should be.
You should experiment with your money management systems until you find what you like and find something that you can actually stick with.
So today I thought it’d be fun to explore the personal finance blogosphere, look at some types of household budgets, and some real life budget examples!
The Zero Sum Budget
The zero sum budget is what I try to use but since my income fluctuates isn’t always realistic for me.
With a zero sum budget you tell your money where to go at the beginning of each month. You divvy up all your income between expenses, investments, and savings until you’re left with a $0.
Here are some more details on setting up a zero sum budget:
- The Zero Sum Budget: How it Can Help You Become Wealthy @Well Kept Wallet
- How to Do a Zero Sum Budget with Mint.com @Growing Slower
- How to Make a Zero Based Budget in 3 Easy Steps @Luke 14:28
Real Life Examples of Zero Sum Budgets:
- My Zero Sum Budget
- Our One Income Family Budget @The Budget Mama
- December Budget @Club Thrifty
The Cash Budget
The cash budget is just how it sounds – you delegate certain amounts of cash to certain budget categories. The cash envelope system was made popular by Dave Ramsey. And….I hate it.
This is by far my least favorite budgeting system. For me it’s harder to track cash and I spend cash like it’s going out of style.
I like to feel the burn of each individual transaction coming out of my bank account so withdrawing a large amount of cash at the beginning of the month doesn’t do anything for me.
That doesn’t mean it won’t work for you though. Here are some great articles on using a cash budgeting system from people who actually like this technique.
- How We Switched from Debit to Straight Cash @ Money Saving Mom
- Free Printable Cash Budgeting Envelopes @ Today’s Nest
Real Life Examples of Cash Budgets:
- Our Half Cash Budget @ Budget Blonde
The Variable Income Budget
So I’m wanting to call this a variable income budget but I think this budget is what a lot of people use whether they have variable income or not.
My way of doing it is to make a budget of expected expenses and then decide what to do with the rest of the money once I know what’s leftover. Realistically, this is how my budget works.
While I tried to do a zero sum budget the truth is my income is never going to exactly match up to the number I listed. So for me, once all expenses are covered everything else goes toward down payment savings.
Here’s some more info on budgeting variable income:
- How I Budget with a Variable Income @ Get Rich Slowly
- Variable Income? 3 Options for Budgeting @Dough Roller
- Budgeting Tips for Freelancers @ Mint.com
Real Life Examples of a Variable Income Budget:
- January Budget @ Retired by 40 Blog
As you can see there are many different ways to budget your money. There’s no one-size-fits-all solution. You have to experiment until you find the best option for you.