How to find the budget approach that’s right for you


Some like a hands-on approach. Others like to be hands-off.

Confidently knowing where our money is going is a whole lot better than panicking as we wonder where it went. That’s what a little budgeting can do for us. 

Okay, budgeting isn’t necessarily thought of as a thrill-packed way to spend our time. But when we see how it can make us feel, we just may find ourselves wanting to take it out for a spin. 

Think of it this way. Imagine getting a superpower (sorry, you won’t be flying or scaling buildings). But what if we got a decision-making superpower that destroyed our money worries? Awesome, right?   


How to build a budget 

So how do we build a budget that puts us in the driver's seat with our money? Let’s start by thinking what kind of approach is right for each of us. Some of us want something that’s easy to understand and use, sort of a “set it and forget it” model. Others want to dig deep into the numbers and look for trends in spending. Regardless of which model we choose, it’s first important to understand our paycheck and when that money hits our account each month.

Now let’s take a look at a two budget approaches to find the one that might be the best fit. 


The Cruise Control Approach 

This budget approach is great for those who want some broad guardrails for their spending, but don’t want to dig into the details. We’ll break our money each month into two categories - the money we spend and the money we save. Pretty simple, right? Let’s dig more into how this works. 

In this approach, it’s recommended that we set aside 20% of the money we bring home each month for savings. The remaining 80% is ours to spend. Here’s how this breaks down: 

  • General spending (80% of income) - This will include things like rent or mortgage payments, utility bills, groceries, car costs, child care, loan payments and more. Any money we spend falls within this category. 
  • Saving (20%) - This will include any money put into retirement accounts, emergency-proof savings and other general savings for goals we may have. 


The Hands-On Approach 

This budgeting approach is for those who want to dig deeper into the numbers. We’ll need to categorize where our money goes, breaking it down based on needs and wants. 

In this approach, we’ll spend 50% of what we bring home each month on essential things, 30% on fun stuff and the other 20% on savings. Here’s how this breaks down: 

  • Essential spending (50% of income) - This will include things like rent or mortgage payments, utility bills, groceries, car costs, child care, loan payments and more.  
  • Fun stuff (30%) - This will include items like dining out, shopping trips, stops at a coffee shop, movies, and other things. 
  • Savings (20%) - This will include money we’re saving for retirement, emergency-proof savings and other savings goals we may have. 
No matter what approach we pick, we’ll be building that special power of knowing where our money is going instead of wondering where it went. And that can feel pretty super. 


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