How to Choose a Money Management Strategy

After years of living in Los Angeles—land of opportunity and sticker shock—my budgeting strategy of hiding from my bank account wasn’t working. I over-prioritized my love for shopping and travel, and under-prioritized my long term financial goals. It was a decade of oops-a-daisy impulse buys.

Who needs a savings account when there are so many destinations waiting to be visited?

I knew I had debts to pay and expenses that wouldn’t go away, and I knew they were obstacles getting in the way of the life I wanted to live. I had a maddening level of subconscious financial stress, fueling anxiety about not having more to show for the solid salary I made. My spending habits were the problem—I just didn’t know how to overcome them and start funding the future I envisioned for myself.

I was wasting time wasting money.

Whatever your aha moment is, and there will be a moment (maybe it led you here!), use that spark of motivation to find a budget strategy that works for you. The truth is, no matter how much money you make, gaining control of your finances is much easier if you follow a tried-and-true method.

Feeling inspired? Check out YNAB’s best budgeting tips.

The Most Common Budgeting Strategies

When you confront your own financial reality and decide to make a change, it can feel like a rough ride at first. The first step toward making a change is knowing your options—because personal finance isn’t one-size-fits-all. Here are some common budgeting strategies to help you get started:

Incremental Budgeting

With an incremental budgeting process, you begin by making small adjustments to your spending habits, like cutting back on unnecessary shopping, sacrificing your commute latte, or reducing your entertainment expenses. As you gain more control over your budget (and overspending), you’ll eventually end up with enough money left over at the end of the month to tackle bigger financial goals, from saving for vacation to tackling credit card debt or paying off a student loan.

50/30/20 Rule

Similar to a well-rounded plate with its protein, veggies, and grains, a 50/30/20 budget plan helps you allocate your income in a healthy way. The first 50% of your income is for necessary expenses, such as monthly living costs. Thirty percent is for discretionary spending, adding a touch of enjoyment to your financial diet. And 20% goes toward savings, debt repayment, or investments, like a nutritious side dish to fortify your financial sitch.

Zero-Based Budgeting

Imagine you have a set of digital envelopes for different spending categories, just like the ones you’d use for physical cash. With zero-based budgeting, like the YNAB Method, you start with an empty envelope for each category at the beginning of the month. Then, you assign a specific amount of money to each cash envelope based on your monthly income and expenses. The goal is to make sure every dollar has a purpose and that your spending follows an intentional plan. So, instead of relying on past spending patterns, you prioritize your expenses every time you get paid.

It may take some trial and error to find the budgeting strategy that works best for you. I tried the 50/30/20 rule, but freelance income made it too confusing for me. DIY budgeting didn’t go so well either, because trying to build a smart spreadsheet after my 9-to-5 job squashed any inkling of motivation I had to gain control over my finances. I also tried the incremental budget strategy, but my desire to travel beat out my willpower to build retirement savings every time.

I knew there was a better, more uplifting way to budget that didn’t make me want to go to Santa Monica beach and put my head back in the sand.

Why I Chose YNAB: A Budgeting Approach for People Who Want to Do More, Not Spend Less

I didn’t know it at the time, but I wanted a budgeting strategy that helped me focus on what I had, could flex with sporadic freelance income, and helped me fund my passions.

I didn’t want to live without guacamole—I wanted to live without financial stress.

YNAB is an app and method that helps you get a handle on your money so you can do more with what you have. Any amount will do! Think of it like a digital envelope budgeting method. With every paycheck, you’ll decide what your money needs to do for you until you get paid again… based on whatever is most important to you. It’s the ultimate pay-yourself-first strategy.

What made YNAB even more effective for me is it’s not about looking back with regret, shaming spending behaviors, or beating yourself up over shoulda-coulda-woulda’s. Following the YNAB Method feels like gazing out through a freshly-washed windshield toward the financial future you want. *Cue Disney music.*

The four rules of YNAB help you build your financial foundation around both predictable spending and unexpected expenses. We all know life is full of surprises that need to take priority over shoes or plane tickets. By embracing true expenses—like auto maintenance, rent, vet visits, holiday gifts, or taxes—you can break down those inevitable future costs and tackle them as smaller, less scary monthly expenses.

But don’t worry, YNAB also encourages room in your spending plan for the things that light you up, nourish your family life, and feel like your best self. In your first YNAB budget, you’ll set up neat and tidy categories for every dollar “job” unique to you, including the fun stuff. Think: gaming, club soccer for the kids, date night, or savings goals like a bucket-list Euro trip. Your categories will ebb and flow as your cash flow and life does, with four simple rules to guide you into a future you’re excited about.

With a budgeting system that helps you fund your priorities, you’ll get to do more, not spend less.

Ready to try a budgeting strategy that helps you fund a life you’ll love? Set up your first budget in YNAB today with our free 34-day trial.