Three Different Budgeting Methods

It's not that hard to find a budgeting method - the key is finding the one that works for you - one that you will actually IMPLEMENT. We want to break down three budgeting methods so you can make your own decision on what works best for you and start to increase profits in your business!

Zero-Based Method

The zero-based budget method involves deducting expenses from income to arrive at a zero balance. This is best for individuals with a steady income and some budgeting experience. However, it can be time-consuming and requires adjusting spending categories when one is exceeded, potentially throwing off the budget if a large expense is forgotten.

Envelope System

The envelope system budget, popularized by Dave Ramsey, operates similarly to the zero-based budget but uses cash for all expenses. This method can be useful for those looking to pay down debt and limit credit card usage, but it may not be suitable for individuals uncomfortable carrying large amounts of cash or preferring credit/debit cards.​ ​You can also use the Profit First method for budgeting - it's basically the virtual version of the envelope method where it is percentage-based, building yourself a cushion in your account. With this, you're always getting paid 5% of the sales​,​ for example, rather than $1000/week. We ​don't structure that system for you, but HarQuin ​can help to move money once it's set up.

50/30/20 Budgeting

The 50/30/20 budget method breaks expenses into necessary expenses (50%), discretionary expenses (30%), and savings/debt payments (20%). This method is less time-consuming and suitable for those new to budgeting but may not be realistic for individuals with significant debt or large savings goals.

Ready to get started? You don’t have to do it alone. We also offer Budgeting Coaching - learn more here.