Welcome to our expert panel, where six financial professionals share their best budgeting tips to help you take control of your finances. Within, they discuss diverse strategies tailored to fit various spending habits and goals, from flexible budgeting methods like the "50/30/20 Rule" to more disciplined approaches like zero-based and reverse budgeting.
MoneyGeek Experts answer your questions
What Are Some Tips for Budgeting?
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Nathan Paulus
Director of Content Marketing, MoneyGeek
Nathan Paulus is the Head of Content Marketing at MoneyGeek, with nearly 10 years of experience researching and creating content related to personal finance and financial literacy. Paulus has a bachelor's degree in English from the University of St. Thomas, Houston. He enjoys helping people from all walks of life build stronger financial foundations.
MoneyGeek is dedicated to providing trustworthy information to help you make informed financial decisions. Each article is edited, fact-checked and reviewed by industry professionals to ensure quality and accuracy.
Editorial Policy and StandardsUpdated: May 10, 2024
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Nathan Paulus
Director of Content Marketing, MoneyGeek
Nathan Paulus is the Head of Content Marketing at MoneyGeek, with nearly 10 years of experience researching and creating content related to personal finance and financial literacy. Paulus has a bachelor's degree in English from the University of St. Thomas, Houston. He enjoys helping people from all walks of life build stronger financial foundations.
MoneyGeek is dedicated to providing trustworthy information to help you make informed financial decisions. Each article is edited, fact-checked and reviewed by industry professionals to ensure quality and accuracy.
Editorial Policy and StandardsUpdated: May 10, 2024
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What are some helpful and actionable budgeting strategies?
![Melissa Griswold, Ph.D.](https://res.cloudinary.com/moneygeek/image/upload/f_auto,c_limit,w_3840,q_auto/c_scale,w_128/v1690385295/Melissa_Griswold_5275c7fc8b.jpg)
Melissa Griswold, Ph.D.:
The "best" budgeting strategy depends on the habits and challenges facing the consumer. Some consumers want and need a flexible budget, while others perform better with rigid guidelines. A fairly flexible strategy is the "50/30/20 Rule" in budgeting. With this method, the consumer spends no more than 50% of their income on "needs." Needs include housing, utilities, food and transportation. No more than 30% of their income is spent on "wants," such as eating out, entertainment and leisure. The remaining 20% or more balance is used to reduce debt and invest in the future.
Consumers who struggle to keep discretionary spending and credit card balances low may need to transition to the "envelope budgeting" strategy. With this method, cash is distributed into envelopes labeled by budget categories at the beginning of the month. Once the cash is depleted in an envelope, no more money can be spent in that budget category for the remainder of the month.
The strategy that may be helpful for consumers who want or need strict guidelines is "zero-based budgeting." This strategy involves methodically allocating every dollar earned into pre-determined categories and only spending up to the allotted amount as defined. Every dollar earned is assigned to a category, and every aspect of income is accounted for.
![Inbar Madar](https://res.cloudinary.com/moneygeek/image/upload/f_auto,c_limit,w_3840,q_auto/c_scale,w_128/v1713397067/Inbar_dc31aefef1.png)
Inbar Madar:
Today, markets and industries change quickly, and adaptability is crucial, especially with regard to finances. I suggest a method called rolling budgeting. Instead of planning for a whole year, you update your budget regularly. This helps businesses quickly adjust to changes in the market. It's also important to keep an eye on how things are going and make adjustments when needed.
![Nate Hansen](https://res.cloudinary.com/moneygeek/image/upload/f_auto,c_limit,w_3840,q_auto/c_scale,w_128/v1648058099/Nate_Hansen_faf61a7023.png)
Nate Hansen:
A super simple budgeting strategy is first to set up all fixed monthly expenses to be automatically debited from your checking account, such as car payments, mortgage, insurance premiums and 5-10% of each paycheck to savings or investing. Then, you use one credit card for all discretionary spending: groceries, restaurants, gas, online shopping, etc. Then, you simply have to keep track of the total amount spent on this credit card to stay within your acceptable spending range.
![Christina Todd, CFP](https://res.cloudinary.com/moneygeek/image/upload/f_auto,c_limit,w_3840,q_auto/c_scale,w_128/v1712045066/CT_websize_headshot_4f839f9c13.jpg)
Christina Todd, CFP:
I like to refer to a "budget" as a "spending plan." The premise behind a spending plan is to help you manage your money so it can fuel your financial goals. It is an understanding of how you relate to money and the control you have over it. I always start by asking clients what their values are—or, besides money, what is important to them. That helps keep the objectives front and center as we create a realistic spending plan.
An example of a spending plan may include the following:
- 50% or less of necessary expenses (housing, transportation, groceries and utilities)
- 30% Financial Priorities (curveball fund, paying off debt, savings for retirement, home purchase, vacation and children's education)
- 20% allowance (discretionary lifestyle expenses like dining out, shopping and entertainment)
![Jordan Patrick, CFP](https://res.cloudinary.com/moneygeek/image/upload/f_auto,c_limit,w_3840,q_auto/c_scale,w_128/v1699845323/Jordan_Patrick_1_3fdc147f95.jpg)
Jordan Patrick, CFP:
Reverse budgeting is a strategy where you determine how much you need to save to reach your financial goals, establish systems and automation to make progress toward those goals without having to think about it, and then you can spend whatever is left over.
To get started with reverse budgeting:
- Review your spending over the past few months and determine an average monthly amount for each category (such as groceries, dining out, entertainment, etc.).
- Evaluate whether any changes should be made. As questions like, "Am I making progress toward my financial goals?" "Does my spending align with my values?" "Which categories would I like to decrease and which would I like to increase?" To help in your assessment, you can use the 50/30/20 rule, which says you should allocate less than 50% of your take-home pay to "needs," less than 30% to "wants," and 20% or more to saving and paying down debt.
- Establish systems to ensure that the identified changes take place. For example, you may want to establish automated monthly transfers into a savings account specifically earmarked for large purchases such as travel or set up automated contributions to your retirement accounts.
![Kenneth Chavis IV](https://res.cloudinary.com/moneygeek/image/upload/f_auto,c_limit,w_3840,q_auto/c_scale,w_128/v1646487684/Kenneth_Chavis_IV_5e9e5e8426.jpg)
Kenneth Chavis IV:
In general, I recommend that people leave a cushion in their monthly budget for unexpected expenses. For example, if you bring home $4,000 per month and know that your rent/mortgage, transportation and food cost an average of $2,500 per month, I wouldn't recommend spending the remaining $1,500 every month. Instead, I would suggest leaving a $250 or $500 cushion if possible to grow your emergency fund and have wiggle room if there is an unexpected expense like a car repair.
Meet the Experts
See the profiles of the experts who contributed to the panel.
![](https://res.cloudinary.com/moneygeek/image/upload/c_scale,q_auto:eco,f_auto,fl_lossy,w_100,b_white/c_scale,w_128/v1690385295/Melissa_Griswold_5275c7fc8b.jpg)
Melissa Griswold, Ph.D.
Associate Teaching Professor of Finance at Trulaske College of Business, University of Missouri-Columbia
Dr. Griswold is an Associate Teaching Professor of Finance at the Robert J. Trulaske, Sr., College of Business. She earned her doctorate from the University of Nebraska-Lincoln in finance, with an emphasis on corporate finance, investments, financial institutions and econometrics. She is an author and entrepreneur. Her research interests include entrepreneurial intentions, debt management, and asset allocation decisions in retirement. She has been recognized for outstanding student advising and teaching achievements at numerous universities over her twenty-five-year academic career.
![](https://res.cloudinary.com/moneygeek/image/upload/c_scale,q_auto:eco,f_auto,fl_lossy,w_100,b_white/c_scale,w_128/v1713397067/Inbar_dc31aefef1.png)
Inbar Madar
CEO and Business Consultant at M.I. Business Consulting
Inbar is a seasoned business consultant and the CEO of M.I. Business Consulting, with a proven track record of success in guiding companies toward financial stability and strategic growth. With expertise in business finances, expansion strategy and team management, Inbar brings a wealth of experience to every project, helping businesses thrive in today's competitive market.
![](https://res.cloudinary.com/moneygeek/image/upload/c_scale,q_auto:eco,f_auto,fl_lossy,w_100,b_white/c_scale,w_128/v1648058099/Nate_Hansen_faf61a7023.png)
Nate Hansen
Certified Public Accountant and Founder of SuperfastCPA
Nate Hansen is the certified public accountant (CPA) and founder of SuperfastCPA.com, where they provide training and study tools for CPA candidates working on passing their CPA exams.
![](https://res.cloudinary.com/moneygeek/image/upload/c_scale,q_auto:eco,f_auto,fl_lossy,w_100,b_white/c_scale,w_128/v1712045066/CT_websize_headshot_4f839f9c13.jpg)
Christina Todd, CFP
Financial Advisor and Vice President at Cary Street Partners
With over ten years of diversified financial industry experience, Christina (“CT”) provides customized financial planning with thoughtful and wide-ranging advice to help her clients and their families achieve their goals. CT specializes in assisting individuals through life’s complex transitional periods, such as career changes, business successions, retirement, and more. CT obtained the CERTIFIED FINANCIAL PLANNER™ designation in 2015 and her CERTIFIED DIVORCE FINANCIAL ANALYST® certification in 2020. She joined the team in 2018. CT graduated from Virginia Tech with a B.S. in Finance. She stays active in her community by volunteering and supporting local nonprofit organizations such as Impact 100. She also serves as a board member for the VCU Massey Cancer Center Advisory Board and Virginia Tech Pamplin College of Business. In her spare time, CT enjoys equestrian activities, reading, and watching Hokie sports games.
![](https://res.cloudinary.com/moneygeek/image/upload/c_scale,q_auto:eco,f_auto,fl_lossy,w_100,b_white/c_scale,w_128/v1699845323/Jordan_Patrick_1_3fdc147f95.jpg)
Jordan Patrick, CFP
Financial Planner at Commas
Jordan Patrick is a Certified Financial Planner™ who is on a mission to help you use your resources to craft a meaningful life. Jordan serves clients at Commas – a financial advisory practice committed to providing every-day people access to honest financial advice.
![](https://res.cloudinary.com/moneygeek/image/upload/c_scale,q_auto:eco,f_auto,fl_lossy,w_100,b_white/c_scale,w_128/v1646487684/Kenneth_Chavis_IV_5e9e5e8426.jpg)
Kenneth Chavis IV
Certified Financial Planner and Senior Wealth Manager at LourdMurray
Kenneth Chavis IV is the Certified Financial Planner (CFP) and Senior Wealth Manager at LourdMurray. He provides financial guidance to executives, entertainers, professional athletes and medical doctors, focusing on preserving and growing their wealth through tailored investment management, comprehensive wealth planning and in-depth tax planning.
Related Content
These related pages provide further information for people exploring budgeting strategies.
- The Ultimate Guide to Budgeting: Learn how to create a budget in this step-by-step guide.
- Best Budgeting Tools and Savings Apps: A list of tools and apps to help people with their budgets.
- Cost of Living Calculator: Get an approximate idea on how much you will pay on living expenses in the city you live in. You can compare cities as well.
- How to Cut Back on Spending: MoneyGeek Experts share tips for how to reduce spending.
- 50/30/20 Method Explained: A guide detailing the popular 50/30/20 budgeting method.
About Nathan Paulus
![Nathan Paulus headshot](https://res.cloudinary.com/moneygeek/image/upload/f_auto,c_limit,w_256,q_auto/v1660684435/Nathan_Headshot_Nathan_Paulus_1_d018f19d65.jpg)
Nathan Paulus is the Head of Content Marketing at MoneyGeek, with nearly 10 years of experience researching and creating content related to personal finance and financial literacy.
Paulus has a bachelor's degree in English from the University of St. Thomas, Houston. He enjoys helping people from all walks of life build stronger financial foundations.