Which method fits which situation
50/30/20: needs 50%, wants 30%, savings 20%. Easy to remember, but the "wants" bucket is a black hole and the savings number is a recommendation, not a hard target. Zero-based: every dollar has a job before the month starts. Best for people getting out of debt or wanting to stop drifting. Envelope: hard caps per category, enforced. Best for people who overspend on variable categories like dining out. None is universally correct — pick the one that fixes the failure mode you actually have.
FAQ
Why does 50/30/20 set my savings so much lower than I'd like?
Because the 20% is gross of the debt minimums and savings goal. If you're aggressively paying off credit card debt, the 20% needs to expand to absorb the extra payment. Use zero-based budgeting for that situation — 50/30/20 was designed for a stable, debt-free household.
How is the envelope "allocation" calculated?
It's the historical average of your last 3 months of spending in that category, capped at 110% to force a small reduction. This is the "behavioral" method — it accepts your habits as the starting point and pressures you slightly downward.
What if my income is variable (freelance)?
Use the rolling 3-month average as the budget. The Freelance Tax tool on this site handles the tax-side complexity. For variable income, the buffer (extra in months when you over-earn) goes into a separate "income smoothing" envelope that you draw from in lean months.
Methodology
50/30/20: needs = 50% of income, wants = 30%, savings = 20%. Needs include rent, utilities, groceries, transport, insurance, debt minimums. Wants include dining, entertainment, subscriptions, shopping. Savings is the explicit "save" category. Zero-based: same categorization, but the savings target is whatever the user inputs as the actual "save" amount — and the difference between income and total spending is shown as a surplus/shortfall. Envelope: each category gets a cap of 110% of its rolling average. Source: popularized by Elizabeth Warren's "All Your Worth" (50/30/20), Dave Ramsey's baby steps (zero-based), and the original envelope method (household finance classic).