Which Of The 3 Common Budgeting Styles Suit You Best?

These budgeting methods are not new. In fact, you might have seen it a couple of times from other articles and blogs.

But which method should you adopt? How do you know if they are suitable for your lifestyle and spending habits?

There is no right or wrong way in this case, as humans tend to adapt well. But there is still the best way whereby you can find the one that you feel the most comfortable with.

This article highlights the pros and cons for all 3 budgeting styles so that it is clear how each style of budgeting may or may not suit you.


This method requires you to split up your monthly income into different proportions, each of it serving a different purpose.

It is typically divided into 3 portions:

Needs: These are necessities like bills, taxes, healthcare, food, transport, household.

Wants: Things you buy for entertainment that may not be necessary.

Savings: The sum of money you put aside to save or invest for the future.

One of the more popular proportional budgeting is the “50/30/20 budget rule”, popularised by Senator Elizabeth Warren in her book, All Your Worth: The Ultimate Lifetime Money Plan. In this case, 50% of your monthly income goes to needs, 30% to wants and 20% goes to savings and investments, hence written as 50/30/20.

The 60/40/0 method can be adopted by a person who prefers to live their life paycheck to paycheck, with all their income spent on both needs and wants.

For those who prefers to focus a lot on savings an investments, there is also the 30/10/60 method. This is especially useful when one decides to move rapidly towards financial happiness/freedom/independence.

What do we think?

+ Proportional budgeting is good for those who don’t wish to follow a strict budgeting rule, but still can control their spendings and savings in general since the proportions are not too specific and allows for buffer. You can even modify it as and when your lifestyle changes.

However, there could be a thin line between Needs and Wants as they are both defined by you and you might blur the line sometimes. For example, a cup of refreshing Coconut Shake by Mr Coconut in the middle of a hot day can be classified as both Needs and Wants depending on how the person justifies his/her action.


This method requires you to put aside an amount of money when you receive your monthly income.

Then.. do whatever you want with the remaining of the money WOOHOO!!

The point of this budgeting style is so that you don’t have to worry about any future huge ticket financial goals that you might have because you are already putting aside money for that.

What do we think?

+ The plus point is definitely the idea of spending on everything and anything(with a budget that can last through the month, of course). You no longer need to worry or feel guilty about not putting aside enough for your future, because you’ve already calculated and allocated money for that. You don’t need to track your expenses as well, which most people finds troublesome.

Great for anyone who doesn’t want to feel controlled for spending!

You would need to do an amazing job to ensure that the money that you set aside is enough for your future goals because if you don’t, you might need to compromise some other goals for that. And worse still, if you do not check your finances often, you will only realise it when it’s too late.

May not work for those who wants to make the most out of their money but their fundamental issue is on spending itself, since this method does not require tracking of spendings.


This method usually involves cash only.

First, you have to figure out what are your major expense categories of the month, such as dining out or for entertainment, then figure out how much money you will need to allocate to it.

Then, go ahead and withdraw cash to divide up between the envelopes.

When your cash in that envelope finishes, you can’t spend anymore.

The idea is as simple as that!

When the cash in the envelope is running low, it forces you to find creative alternative methods to sustain yourself and get the most out of your money, be it finding vouchers or promos.

What do we think?

+ This method forces you to stay in touch with your spending habits and it is best for those who have problems controlling their spending with credit or debit cards and are not sure where their money vanished to every month.

It also works well people who are getting out of debt and as it ensures discipline and reducing wasteful spending.

It only works best if you are using cash, and that itself could be troublesome for some. You can always implement this method on cashless alternatives, but the level of discipline needed would be higher due to the convenience of payment.

Also, getting started can be confusing. For example, multiple envelopes are needed when you head to the supermarket and purchase many varieties of items such as toys, clothes and food.

This method also requires a few rounds of testing for you to be clear how much money should be accurately allocated in each envelope.


As you can tell, not all budgeting style fits you, even though you may think you are able to follow all of them.

If you’re looking for a suitable budgeting method and are not in a rush, my suggestion is that you take a couple of months to test out each budgeting styles just to experience what is it like, before deciding.

There are plenty more budgeting styles available for you to explore such as Zero-Sum budget, the typical Line-Item budget, No-Budget budget and Values-Based budget.

The trick to success is to stick to a style that works for you and persevere because it can be easy to just give up entirely.

If you require any assistance or input, feel free to contact us here or at any of our platforms.


Disclaimer: This post is for your information only and does not constitute any form of financial advice, you may wish to seek advice from a financial consultant before making a commitment to purchase any product.