4 Budget Hacks That Help You Save!

Balancing That Budget may be compensated if you make a purchase after clicking on a link

Everyone should have a budget. That’s a bold statement however, given that I’m a Charted Accountant, I can’t stress enough how important they are. Not only do budgets help you stay organized, but they also help you get out of debt and relieve stress.

It’s been proven that money is the main source of stress for both Americans and Canadians. If you don’t have your money organized, it’s hard to understand where you’re spending and how much you’re actually saving.

Today I’m going over 4 budget methods that will help get your finances back on track! I’m going into each method in detail and why it might be best for you.

1) 50/30/20 Budget Method

Who Is This Budget Method For?

I’m starting off with this budget method because it’s simple, however, it also takes a good hard look at your expenses. This method is for those that have either tried budgeting in the past and it was too cumbersome, or have little to no budgeting experience and want to get organized.

What Is This Budget Method?

Under this budget method, you organize your monthly income into the following categories:

  • 50% To Living Expenses
  • 30% To Wants
  • 20% To Debt & Savings

Calculating The 50/30/20 Split

Living Expenses

50% of your income after tax should be put towards living expenses. These are the expenses that maintain your basic quality of life. Some common living expenses are:

  • Rent
  • Groceries
  • Mortgage
  • Transportation (gas)
  • Health
  • Utilities
  • Minimum debt repayments


30% of your after-tax income then goes into the wants category. Here you will find the things that you want, however, that you don’t necessarily need:

  • Beauty (makeup, hair products, etc.)
  • Clothing
  • TV (Netflix, Hulu subscription)
  • Dining Out
  • Home Decor
  • Travel


Lastly, you put the remaining 20% towards debt repayment and savings.

  • Student Loans
  • 401K or RRSP (Canadians)
  • Credit Card Debt (above your minimum monthly repayments)

[convertkit form=977833]

Overall Thoughts

This is an extremely basic way to look at budgeting and it doesn’t favor paying off debt or savings. Therefore this method isn’t for everyone especially if your primary goal is paying off your debt. With that said, this method is great if you’re just starting to get your finances organized or if you get overwhelmed with budgeting. You can easily add in more categories as well into this method to make it more tailored to your needs!

2) Zero-Based Budgeting

Who Is This Method For?

This method is more complex. Under zero-based budgeting, every single dollar is accounted for. If you want to know exactly where your money is going, this method is for you.

Zero-Based Budgeting takes time since you’re assigning every single dollar of your after-tax income into your budget. However, this method is also highly effective for many people. Knowing where your money is going and making sure you’re sticking to a budget that is personalized to you, can really help bring down your debt and increase savings.

How Does It Work

Zero-Based Budgeting runs off the following formula:

After-Tax Income – Expenses – Debt – Savings = $0

  1. First, determine your total monthly income after tax.
  2. Next, determine where all of your money is going currently. That means looking at your credit card statements and bills.
  3. Organize your current monthly expenses into categories. E.G Rent, Gas, etc.
  4. Organize your current monthly savings and debt repayment into categories as well.
  5. Next, try out the formula. If you have money left over, you need to allocate it to a category.
  6. Once finished your income less your spend should equal $0. That way you know where your money is going.

From there you can figure out if you’re spending too much in one category and make goals to rearrange spending in the coming months.

Overall Thoughts

Given the time commitment and the attention to detail, this method is for someone who either has a goal in mind (like debt repayment) or someone who is an advanced budgeter. It’s a strict method, however, can be quite effective when organized correctly.

Zero-Based Budget App

If you don’t want to create a Zero-based budget yourself there’s a great app on the market that can do it for you! YNAB (short for You Need A Budget) is an app that focuses on the Zero-Based Budget theory. It synchronizes your bank, credit cards and loan accounts onto the app with ease. They also offer great customer service through email (responses come within 24 hours.)

App Store: Download YNAB Now!

Google Play Android: Download YNAB Now!

3) Envelope Method

Who Is This Budget Method For?

If you like a strict, organized budget the envelope method is for you! The envelope method originated way back when you still paid your bills in cash.

How Does It Work?

First, let me explain how it worked when carrying cash was more prevalent:

  1. You create physical envelope’s for each billing category (EG: Groceries, Hydro, Clothing etc.)
  2. You then assign a specific amount of money per month to each envelope and put the physical cash inside the envelope.
  3. Throughout the month, you can only spend what you assigned to each envelope. If you run out you have to wait until the next month.

Bringing This Method Into the 21st Century

No one carries physical cash around anymore and no one pays their bills in cash so carrying out the traditional envelope method won’t work for the majority of us. The good news, is that there are many apps that use the principles of the envelope method however, everything is completed electronically.

I recommend using: The Goodbudget App


The Goodbudget app is rated extremely high in the app store (4.6/5) and has been widely accepted within the financial community. Goodbudget is based on the envelope method but of course, put an electronic spin on it. First, you link your bank accounts to the app (the app is secure). You can then create virtual envelopes and allocate money from your bank accounts to those envelopes. I highly recommend checking out this app if you think the envelope budget method is something you want to try.

App Store: Download the Goodbudget App Here

Google Play Android: Download Goodbudget Here

4) 60% Solution

Who Is This Method For?

This is by far the simplest budget method on this entire list. If every other method seems too complex, if you have variable income, or if you aren’t great at tracking your expenses this one is for you!

How Does It Work?

Created by Richard Jenkins who is the former editor and chief of MSN Money, the budget is organized into two categories, plus you don’t track any expenses. 

After looking over his finances, Richard realized that he felt the most financially secure when he was spending under 60% of his income on committed expenses.

What Are Committed Expenses?

Committed expenses are the necessities to maintain your quality of life and anything else you have committed to. Some might include but aren’t limited to:

  • Food
  • Clothing
  • Bill Payment
  • Insurance
  • Debt Payment
  • Gym Membership

Under this method, your spending on these categories shouldn’t exceed 60% of your income. 60% isn’t a hard number, you can make it customized to you but stay in that range.

Remaining 40%

The last 40% is broken into 10% increments that are custom to him. It goes towards debt repayment and savings. Here are some examples of what the 10% increments could look like:

  • 401K or RRSP
  • Long-term savings/Investments
  • Short Term savings
  • Spending Money (this should never exceed 10%)

Overall Thoughts

This method is great if you are looking for something less rigid. It’s also easier to manage if you have more variable income. One thing, however, is if your main goal is debt repayment, make sure your minimum payments are included in your committed expenses. Then determine if a portion of the remaining 40% should also go towards additional payments.

Budget Apps

Not into budgeting on your own and want an App to do it for you? Don’t worry you’re not alone! Check out my article where I summarize 5 of the best budgeting apps out there that will help you get your spending in check!

Click for the 9 Of The Best Budgeting Apps

Our Brands

BTB Logo-Black


Jenna Morton CPA,CA

Jenna Morton is the founder of Balancing That Budget as well as a Chartered Accountant with 10 years of industry experience. To learn more visit the About Page!

Leave a Comment

Want a FREE interactive budget spreadsheet to help you get back on track?

Get the free spreadsheet to your inbox!

New On the Blog

Popular Posts