Over the years I have tried almost every type of budget that I could find.

The traditional budget, the 50/30/20, the 80/20, and the zero budget. All of these have their advantages and all of these are easy to set up but just as easy to get off track.

The traditional budget is what most people tend to think of when budgeting. You write down your income and subtract your expenses. Seems simple enough but when you have multiple ways of spending it becomes hard to track all the money going out.

Let’s face it, most of us are not honest with our budget. We may overspend in one category but decline to make changes in another to compensate. We borrow on credit and eventually get ourselves into trouble.

The 50/30/20 Budget

The 50/30/20 budget is a bit better to track as you break down your expenses by simple categories: needs, wants, and savings. The idea is that 50 percent of your income should go to needs, utilities, rent, transportation, and groceries. Thirty percent should go to wants, clothing, entertainment, and eating out. And the remaining 20 percent goes to savings.

This technique makes it easier to see how you are overspending. If your needs represent 70 percent of your income than something needs to change. This also helps keep you from hiding purchases. If every penny brought in is spent then it becomes harder to be dishonest. Of course, credit cards make it easy to do so.

The 80/20 Budget

With the 80/20 budget, you pay yourself first, which you should always do. You take 20 percent of your income and put it into savings and the rest you spend on whatever you set up as categories. The percentages can change as you bring in more money, but the overall concept is easy to follow.

I started with the 80/20 method although it was more like 90/10 at the time. I was bad with money. I would not keep track of all my purchases and used credit cards when things got tight.

How Not To Budget

My way of budgeting was to have a set amount that I could not dip below in my checking account and have a little set aside in savings. I had a bare minimum emergency account and used that to spend on items when they came up. Items that were not actual emergencies.

This was a terrible way of budgeting and I would learn it the hard way. We would spend all our money upfront and then stop spending. Not only did this cause me anxiety it also put a strain on my relationship.

We would get close to payday and I would have $200 left in checking. Even if we budgeted for a visit to Starbucks I would get upset and anxious about it and my wife would end up not going. We would have discussions (arguments) about where we were with the budget and it never accomplished anything.

Break Your Old Habits

This has been a hard habit to break. We now use the 50/30/20 method and even though I have everything accounted for and run my budget to near zero I still get anxious when my checking account drops below $500.

I keep having to tell myself, “relax, you have a budget.”

The psychological effects of the bankruptcy still linger. This is not necessarily a bad thing as I will never repeat the mistakes I once made. It just becomes harder to let go of the anxiety.

This is also a result of not completely tracking my spending. Lack of communication between my spouse and I have led to ‘surprises’ in our budget. Recently it was a scheduled doctor’s appointment that she failed to mention to me. I do the same with her. We don’t always communicate every expenditure.

All parties involved have to stick to the budget for it to be successful.

Your Budget Should Account For Every Dollar

What happens is I divert the money that is going to savings to leave “enough” in the bank. I put enough in quotes because it is relative to what I think the amount should be. Really it should be closer to zero but the fear of poverty makes me keep more in checking.

My savings account is in a different bank than my checking. This is because my local bank has a really terrible interest rate for savings. This makes it a bit more difficult since it takes several days to transfer between them. There is always Zelle so I am not worried about the timing. Also since I have a budget I should not worry about surprises.

Spare Change Savings Account

I do also have a ‘spare change’ savings account that has some money in it in case there are some minor discrepancies. This is where the bank moves a set amount from every transaction to a savings account. I have been moving money from the account as it grows too big. I leave just enough to accommodate a very minor miscalculation.

With whatever budget method you choose, you should maximize every dollar spent. The budget should account for savings and spending and you should ultimately have zero at the end of the month.

If your budget is sound you can truly relax and not worry about it. This will help your mental state in the long run. I am getting there. It takes a bit of time to recover from poverty.