6 Different Kinds of Budgets For People Who Hate Budgeting

Different kinds of budgets can actually help or hurt your money. It’s true! Even if you despise budgeting, having the right kind of budget plan can help you stress less about money.

I know, I know — the word “budget” is usually associated as four-letter word and prompts feelings of dread and complaining. Don’t worry, I too share that same opinion, and show my resistance by breaking a few rules.

I like to think of my budgets as a “spending plan” instead of a budget and prefer to be more flexible with my money and financial goals. However, this is not to say that budgets don’t have their place.

As much as we don’t like them, different kinds of budgets are still a necessary weapon for any financial arsenal.

They help straighten out our habits and make our long-term money goals more attainable. Plus, a budget plan lessens the confusion that comes with managing your money.

If you’re struggling to stick to a budget, try one of these six different kinds of budgets to see which one works best.

1. Time-based budget (weekly, monthly, yearly)

A time-based budget plan is anything that needs to be tracked within a specific time, such as weekly, month or yearly. This applies to various bills that come around very often, or very sporadically.

Here’s how to create a budget that’s time-based.

Weekly budget

For those of you who get paid every two weeks or on a weekly time-frame, creating a weekly budget might the best route to take. I still suggest having a monthly snapshot budget, so you aren’t blindsided and broke, during the last week of the month.

I prefer to set up a weekly allowance for things like eating out, getting coffee, buying groceries or gas and etc. These are purchases I make on a weekly basis, so I need to make sure I’ve got money in my account, every week.

Monthly budget

A monthly budget is one of the most common ways to track your money. No matter how often you get paid, every month consists of the same type of expenses (rent/mortgage, gas, utilities, food).

I like to create a monthly “snapshot” budget at the beginning of each month. This gives me a quick overview of my payments, that I can finalize once the bills come in.

Yearly budget

A yearly budget analysis is something I started doing at this beginning of this year. While having a weekly/monthly budget is a must, a yearly budget can reveal a lot about your personal spending habits.

For instance, many of us spend more money over the holidays or summer vacation, than we do during other times of the year.

This is also a nice method to use if you’re calculating your spending limits backwards. What I mean is, I thought I was only spending $80 a month or so, for gifts and lending friends/family money.

But when I looked at my yearly spending, it totaled more than $1,700 (Yikes)! Sometimes a yearly budgets helps cut back on spending by shocking us with a bigger dollar figure.

Yearly budgets will also consist of yearly expenses, like contributions to a HSA (health savings account), saving for retirement or insurance premiums. It’s important to include all of the expenses you pay, whether they are weekly, monthly or yearly, so you don’t overspend.

2. Cash-only budget

Whether you’re managing your freelance finances or simply balancing your household bills, sometimes a cash-only budget is necessary for getting back on track.

Obviously, a cash-only budget means that you only cash (or a debit card, in some cases) for paying all of your bills and other discretionary spending.

I highly recommend this as part of a regular “pruning process” in order to reign in your spending if it’s getting out of control. In fact, I put my freelance business on a cash-only budget for 60 days so I could pinpoint the areas I needed to cut back on.

3. Bare bones budget

A “bare bones” budget is basically a plan for your most basic necessities in life, such as food, shelter, clothing and transportation.

In the event of job loss, medical emergency or death in the family, you may temporarily need to cut out all non-essential spending. The best way to find out if you can survive in an emergency situation like that, is to have a back up plan, with a bare bones budget.

I like to keep my essential living expenses at no more than 50% of my net income. This helps me feel secure that if my paycheck gets cut at work, or I can only find part-time work, I can still pay my bills.

How to overcome freelance business emergencies.

4. Special events budget

Special events consist of planning for a wedding, quitting your job to work at home full-time, a new home purchase and retirement. These categories will continue to change as we get older and our lives change.

This means they need to be updated over a period of years, and not weekly or monthly like most expenses. This type of budget is set up for long-term goals, and takes a good amount of planning to achieve.

5. Irregular income budget

Whether you have a side hustle or are a full-time freelancer it’s very likely you have to deal with irregular income. It’s not easy to balance the income you receive from clients and the bills you have to pay on a regular basis.

The best thing to do is set up a system where you make saving for taxes similar to paying a regular bill. That way you won’t get into more debt, or other financial trouble, once tax time rolls around.

It’s also important to implement a process for following up with clients who are late paying you. That’s the heart and soul of being a successful freelancer so do you what you can to be paid ON TIME.

You want to stash as much cash as possible to help cover lean times so you’re not stressed out trying to pay bills on time.

6. Cash flow budget

If you’re looking for a way to streamline your business finances, then it’s time to start working with a business budget. This can get complicated but in order to simplify it you must first evaluate your cash flow.

Cash flow takes into account all of your income and expenses as it relates to being a business owner. Then you can divvy up the rest of the funds and pay yourself a salary, or re-invest it back into your small business.

Having different kinds of budgets

As someone who despises budget, you have to put budgeting into the right perspective. It’s a means to an end! One that will help you achieve your goals of financial freedom and building wealth.

Of course, each of us will be drawn to a different kind of budget for our personal situation. So don’t I encourage you to experiment and test which works best.

You will be surprised how each type of budget plan makes your life, business and money simpler.

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