This article was written and originally posted by The Financial Diet in partnership with M&T Bank.

Read a totally-honest review of five popular budget strategies from personal finance blogger and TFD contributor Alyssa Davies.

By Alyssa Davies

July 23, 2019

We’ve partnered with The Financial Diet to bring you a series of smart savings tips from real women who’ve made their money work for them — and weren’t always so savvy. We’ve always focused on bringing you personalized money success stories (and learning experiences!) because, at the end of the day, there is simply no one piece of generalized money advice that’s going to apply to absolutely everyone. At M&T Bank, we don’t believe in a one-size-fits-all approach to finances, because everyone’s situation is different. We take the time to understand what’s important to our individual customers so we can help with their specific needs and goals.

Read on for a totally-honest review of five popular budget strategies from personal finance blogger and TFD contributor Alyssa Davies!

Did you know creating and managing a monthly budget is kind of an important factor to determine your financial situation? I mean, if you earn an income or have any money at all, you should definitely know where it goes each month. 

If you just scoffed and said “duh” — same.

There is a catch, though. I’m sad to report that there is no universal budget to fit how each person should save and spend their money — but there are a ton of great options out there that can help you take control of your finances. To find the one that works for you, let’s break down five of the most popular budgeting strategies to see which ones are actually worth your time.

1. The 50/30/20 Rule

Who is she? 

This budgeting strategy is more of a structure. Think of it as sort of a pyramid, where the base is 50% of your income going towards necessities, the middle is 30% of your income free for discretionary or lifestyle spending, and the tip is 20% of your income, which goes directly to savings goals or debt payoff.

Will she work for you? 

If you have a consistent income — most likely. If you have a rollercoaster income — definitely not. Personally, I’m a big fan of this strategy. As someone with a set monthly income and a really simple set of fixed expenses, it’s really easy to make the numbers work. 

However, this method is not for everyone, and I’ll tell you why: if you have 30% of your income left over for discretionary spending, you must be doing well financially. Which is, I mean, great for you — but the reality is that most people are living paycheck to paycheck. Those of us who do would likely need a budget that can help control our spending more than the 50/30/20 rule does.

How do I rate her?

4/5 stars

Only having to worry about three percentages is a lot better than trying to divide all of your cash flow into multiple categories. I couldn’t give her a full five stars, though, because if you live paycheck to paycheck, this plan might be a hard pass.

M&T’s Easy Save makes saving a fixed percentage of your income as simple as possible. You can set up an automatic savings plan that moves money from your checking account to your savings account as often as you like. 

2. The “Pay Yourself First” Budget

Who is she?

The “pay yourself first” budgeting strategy is one that puts your savings at the forefront. Rather than focus on the percentages, this unorthodox strategy is all about goals. Not the cringey #RelationshipGoals, but the essential goals that help with maintaining good financial records. First, you will write down your savings goals. Once you receive your paycheck you will automatically contribute your savings to the necessary accounts, paying yourself first. After you’ve subtracted this amount from your monthly income, the rest will go towards fixed expenses and living expenses.

Does she work for you?

If you have a ton of financial goals — both short and long term — this strategy is definitely for you. On the flip side, if you are struggling to pay your bills each month, you might want to focus on getting those covered before you let your automatic contributions flow. Saving is extremely important, but so is paying bills on time and in full. Therefore, you’ll have to make a decision on what is more of a priority for you and your financial situation. 

How do I rate her?

2/5 stars

This strategy sounds a lot more practical than it is, in my personal opinion. To me, your fixed expenses will always come before your savings. 

3. Envelope Budgeting

Who is she?

This anti-digital tactic for budgeting your money is easy to manage but tough to follow through on. The entire system means you only keep the exact amount of cash you need to spend each month, including both fixed and variable expenses. First, you would determine how much you have available after bills and then you would decide how much you put aside for savings. You’d choose your categories — say, household, groceries and entertainment — and place the appropriate amount in each labelled envelope. Once that envelope is empty, you can no longer spend money on that type of expense. Leftover money can be pushed forward or added to savings accounts.

Does she work for you? 

As we mostly live in a cashless society, this budgeting strategy can seem a bit archaic to some. On the other hand, it’s a great way to take your financial situation offline and allow you to look at the cold hard cash that you spend each month. If you typically spend more than you earn, this is a great way to control lifestyle inflation. The only reason this system might not work for you is if you tend to do a lot of online banking or shopping. Although, if you are always on your phone like me, this budgeting strategy might be a good way to disconnect from a digital platform without losing Instagram.

How do I rate her?

3/5 stars

I love the ability to go credit and debit card-free, but let’s be honest — in this day and age, it’s really hard to pay rent in cash.

In an increasingly cashless world, it pays to have the best credit card for your situation. Learn more about M&T Bank’s credit card offerings.

4. Tracking Your Spend

Who is she?

For anyone who loves a good Excel spreadsheet or personal finance app that helps you manage your money, tracking your spend can be a great way to stay on top of things. This style of budgeting is just as she sounds — tracking every single purchase you make down to the cent. The reason this strategy is as popular as she is would be because she provides a great deep dive into your current financial habits and allows you to be more aware of where you tend to spend the most. 

Does she work for you?

If you keep receipts, never delete photos from your phone and are always on inbox zero, this type of budget might be the golden snitch. However, all of these numbers can be extremely overwhelming to manage. As someone who has attempted to track her spending for months at a time, it can be tedious to remember every single place and consistently update your spreadsheet or app. 

How do I rate her?

2/5 stars

There are better ways to monitor your financial habits than to nit-pick every single purchase you make. You’re not perfect — and this tactic might remind you of that fact a little too often.

5. Zero-Based Budgeting

Who is she?

Unlike most budgeting strategies that leave some money unaccounted for, this one does not. The idea behind zero-based budgeting is that your money income and your monthly expenses should be even. Every single dollar you earn has a place that it belongs to. If you have $100 left over after paying your fixed expenses and enjoying your non-essential purchases, this system would require you to find a place for that $100 bill. Perhaps you invest the money, perhaps you put that leftover money towards debt repayment. Either way, it’ll be accounted for. 

Does she work for you?

This tactic can be awesome for anyone who is planning to save more money. I’m a big fan of zero-based budgeting because rather than keep some money sitting idly by in your checking account, you can be confident that you are good to go with every potential financial goal in your plans. If you always keep a chunk of change as your emergency fund, why not put it into an actual emergency fund, where it will grow? 

How do I rate her?

5/5 stars

You deserve to make every single dollar you earn work for you. Not only that, but this budgeting strategy is good for all incomes and all lifestyles. It’s a win-win in my book.

The Bottom Line

Your mindset will be the biggest factor when you choose the best way to budget for yourself. Whatever stage of life you are in can significantly impact how you choose to save and spend your money and any budgeting strategy that works for you is the only strategy that matters.


To learn more about how M&T can help you reach your savings goals, visit a branch near you.

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This content is for informational purposes only. It is not designed or intended to provide financial, tax, legal, investment, accounting, or other professional advice since such advice always requires consideration of individual circumstances. Please consult with the professionals of your choice to discuss your situation.

M&T Money Mentor content is provided by EVERFI, Inc, for educational purposes only. It is not intended to be an offer or solicitation for a product or service and is not an offer to extend credit. The information provided is also not intended to provide investment, tax or legal advice and may contain information on products or services not available at M&T Bank and may describe practices or policies not available or applicable to M&T products. All examples are for illustrative purposes only.