7 Budgeting Techniques to Keep Track of Your Spending
7 Budgeting Techniques to Keep Track of Your Spending
One of the biggest life-altering game-changers in financial management is knowing exactly where your money is going. If you're going to work every day to make the moolah, then it's crucial to understand how you spend that moolah and where it's going. This is an activity that I do with ALL of my coaching clients, because it's the framework of how you build wealth.
This is also how I personally launched my coaching career. Way back in 2016 (when I was just a young pup) I created a budget, stuck to it, and managed to save $20,000 on a $50,000 income so that I could backpack around the world.
After the Huffington Post picked up my story, the rest was history. You can click the link below to read my story, but just come back to this post afterwards to read about the techniques you can use to create your own spending plan!
I like sharing my story with you to explain to you that it's not about how much money that you make, it's what you do with your money when you have it.
That's where budgeting comes in—but the trick is to find a system that actually works for you.
I'm a detailed-oriented type-A control freak that feels so empowered when I know where every $$$ is going - this is a characteristic that I picked up from my momma. I remember her sitting at her computer, inputting all of her expenses every month on her MyMoney Microsoft program and always wondering why she was doing it. I get it now!
I still keep a budget to this day (and actively track it) so that I can live the life I want while still working towards achieving my financial goals. I get that my track-every-dollar system doesn't work for everyone, so I wanted to break down the different types of budgeting methods that you can use to help you keep your cash flow in check without feeling restricted.
Whether you're a detailed planner, a free spirit, or somewhere in between, there's a budgeting method for you. So let's break down my favourite top 7 techniques to help you manage your money with ease.
1. Traditional Budget
This is the OG of budgeting. You list out all your income and expenses, categorize them, and allocate a set amount for each. The goal is to track every dollar coming in and out to ensure you’re living within your means. While this method can be time-consuming, it’s great for those who want full visibility into their spending. This is the budgeting method that I use!
Best for: People who love spreadsheets, tracking details, and knowing exactly where every dollar is going. If you're looking for a traditional budget of your own, I sell the one that I use with my coaching clients.
2. Zero-Based Budget
With this method, every dollar of your income is assigned a job—whether it’s for bills, savings, investments, or fun. The goal is to have your income minus your expenses equal zero at the end of the month. If you have money left over, you allocate it somewhere rather than letting it sit without purpose.
Best for: Those who like structure and want to maximize every dollar.
3. 50/30/20 Budget
This is where you divide your income into three categories (where you can be somewhere flexible with the percentage allocation based on where you live): I know that there is no way in hell right now that I'm able to keep 50% of my budget for needs because we live in Toronto. That is closer to 60% for us, 20% for wants, and 20% for savings - but you do you!
50% for needs (housing, groceries, bills)
30% for wants (dining out, entertainment, travel)
20% for savings and debt repayment
This method helps keep spending balanced while ensuring you're saving consistently.
Best for: People who want a structured yet flexible budgeting style without micromanaging every dollar.
4. Goal-Based Budget
This is where you focus on your financial goals first—whether that’s saving for a house, paying off debt, or funding that dreamy vacation you've been drooling about. You set specific targets and prioritize putting money towards them before anything else. This is where you'd pay your necessities first, then goals, and then whatever is leftover can go towards your wants.
Best for: People with clear financial goals who want a results-driven approach.
5. Pay Yourself First Budget
Instead of spending first and saving what’s left, you flip the script by saving first and spending later. I set up all of my clients in this method throughout our coaching (along with one of the other methods mentioned in here). As soon as your paycheck hits, you automatically send money toward savings, investments, and/or debt payments and then cover day-to-day expenses.
Best for: Those who struggle to save and want to build wealth effortlessly.
6. Spending Cap Budget
Rather than tracking every category, you set a dollar limit on your non-essentials. As long as you stay under that cap, you don’t need to worry about tracking every purchase.
Best for: Those who want simplicity but still need some spending boundaries.
7. Envelope System
This old-school, cash-based method involves setting aside money in physical envelopes for different spending categories (like groceries, entertainment, dining out). There are some pretty cool envelop system budgets on Etsy and online so make this fun!
Once an envelope is empty, you stop spending in that category for the month.
A modern twist? Using digital ‘envelopes’ in budgeting apps like YNAB (American based), OR you can set up different savings accounts to be your envelopes.
Best for: People who struggle with overspending and need a tangible way to control expenses.
Finding Something That Works For You
The best budgeting method is the one that you’ll actually stick to. If one doesn’t work, try something else! No matter which method you choose, staying consistent and being mindful of your spending will help you take control of your financial future.
You can even mix and match—maybe you use the 50/30/20 rule as a framework but also implement a pay yourself first mindset to build savings.
I know that this can be a really difficult activity to go through (and can sting like a bitch when you go through what you've been spending), but I can promise you that when you've set up a new habit in doing this that you will see your Net Worth go up over time.
I help clients create spending plans that align with their goals—without sacrificing what makes life fun. Ready to learn how?
