"There are a number of budget formats you can use, like the 50/30/20 budget, for example, where you divide your expenses into three categories—50% toward needs, 30% toward wants, and 20% toward savings or debts," McCreary says. "With the 50/30/20 budget, you're reducing the amount of time you spend detailing your finances, allowing you to focus more on the big picture instead."
Figueroa offers her clients the "One-Number Approach" to budgeting. "It involves calculating how much money they can afford to spend on 'flexible costs' (aka the things that might vary in cost—ones you have to make decisions about) each week," she says "Then you only have to remember that one number on a day-to-day basis. This weekly number can be easier to track than a monthly budget—plus, it makes it less likely that you'll run out of spending money later in the month." The one-number is used for necessary things, like groceries or gas, but also "fun" stuff like eating out, shopping, entertainment. She says that as long as you stay within this one number, you're free to spend the money each week however you like without guilt or shame.
Figueroa describes how you can calculate your "one number":
1. Start with the total amount of take-home pay you expect to earn during the month. This is what actually hits your bank account after taxes, retirement contributions, health deductions, etc.
2. Subtract all your monthly fixed costs or those that stay pretty much the same on a month-to-month basis (like rent, debt minimums, subscriptions).
3. Subtract the money you'll set aside for "Future You." These are your short- and long-term goals that you identified using your values! Saving, investing, and debt payments beyond the minimums.
4. Subtract the amount you need to save for non-monthly expenses. These are things that pop up throughout the year, just not on a monthly basis. Think travel, annual subscriptions, gifts, semi-annual insurance premiums, etc. Add up how much all these things cost per year, then divide by 12. You'll set aside that number on a monthly basis (and tap into it as those expenses come up).
5. What's left is your monthly flexible spending money. Divide your monthly flexible spending money by 4.3 (the average number of weeks in a month). This is your one number.