The Best Way to Budget: 5 Budgeting Methods and How to Budget With Purpose

After my first budget tracker webinar, one thing became very clear: there is no one right way to budget.

By the end of the session, my brain was completely fried 😅 — bilingual webinars are intense! 

Many people assume that budgeting only works if you use a specific tool. In reality, the best way to budget is the one that fits your lifestyle, your values, and your financial goals.

To continue the conversation, I asked my WhatsApp community:

What method do you use to budget or track your money?

The answers showed just how many different ways to budget exist. Below, I break down the most common budgeting methods, their pros and cons, and how to choose the best budgeting method for you.

Why There Is No One Right Way to Budget

Budgeting is personal. Your income, responsibilities, culture, and goals all influence how you manage money. That’s why comparing your budget to someone else’s often leads to frustration.

Understanding the different budgeting methods helps you make informed choices instead of forcing yourself into a system that doesn’t work.

1. Notebook or Journal Budgeting Method

This traditional budgeting method involves writing down income and expenses manually.

Pros:

• Encourages awareness and intentional spending

• No technology required

• Ideal for budgeting beginners

Cons:

• Time-consuming

• No automation or data analysis
  

Best for: People who value mindfulness and simplicity in personal budgeting.

My experience 

I started budgeting with a notebook because writing things down felt intentional. But after about three weeks, I lost it — and ended up keeping important deadlines like insurance and loan repayments in my head. Instead of reducing stress, it increased my mental load. I quickly realized I needed more structure and visibility.

2. PDF Budget Diaries for Budgeting

PDF budget planners provide structured layouts for tracking expenses.

Pros:

• Visual and organized

• Beginner-friendly

• Works digitally or printed

Cons:

• Limited flexibility

• Manual calculations
  

Best for: Visual planners who want structure without complexity.

My experience PDF budget diaries worked well for me when I was a student. My finances were simple, with no major expenses, so monthly tracking felt easy and effective. That phase inspired me to create the Mindful Bliss Budget Diary.

As my financial life grew, I needed something more flexible.

3. Budgeting Apps: Digital Budget Tracking

Budgeting apps automatically track spending and categorize transactions.

Pros:

• Convenient and automated

• Real-time insights

• Easy budget tracking

Cons:

• Subscription fees

• Privacy considerations

• Less intentional spending awareness

Best for: Busy individuals who prefer automation.

A friend’s experience

One of my friends uses a well-known UK budgeting app linked directly to her bank account. Transactions are automatically categorized, expenses tracked in real time, and goals updated effortlessly.

The automation makes budgeting very easy. But over time, she realized she had handed over too much control. With decisions made automatically, she became more passive in her money choices. It’s a great reminder that convenience is powerful — but intentional decision-making still matters.

4. Envelope Budgeting Method (Cash-Based Budgeting)

The envelope budgeting method assigns cash to spending categories.

Pros:

• Strong spending control

• Great for reducing overspending

Cons:

• Not practical for online spending

• Limited long-term tracking

Best for: People rebuilding spending discipline.

My experience & a friend’s perspective

A friend used the envelope system successfully at first, until she started moving money between envelopes to cover overspending. The issue wasn’t the method, but not fully understanding her spending. For me, cash never felt practical, and once I learned to use credit cards responsibly, I preferred leveraging cashback and points. For my lifestyle, envelopes felt limiting.

5. Spreadsheet Budgeting (Excel or Google Sheets)

Spreadsheet budgeting offers full control and customization.

Pros:

• Flexible and scalable

• Automatic calculations

• Excellent for financial goal tracking

Cons:

• Learning curve for beginners

Best for: People who want detailed financial clarity.

My experience

Spreadsheets changed how I manage my money, but it took time. If it feels overwhelming at first, don’t be discouraged — learning any new skill requires patience and discipline. Today, they help me see my long-term goals clearly. I feel like the captain of a cruise: I know the destination, and everything is aligned for the journey. This first step helps Unlock Financial Freedom.

The Best Way to Budget Is With Purpose

Budgeting with purpose means aligning your money with your values and long-term vision. This is the foundation of financial freedom.

When your budget has purpose:

• Your spending supports your goals

• Saving becomes intentional

• Money decisions feel empowering

Budgeting Is Not Just About Numbers, It’s About Financial Vision

A budget without purpose is simply a list of expenses. A purpose-driven budget becomes a roadmap for your life.

I’ve written several articles on money mindset, financial clarity, and vision that can support your journey.

👉 Budgeting with Purpose

👉 How to Prepare Your Budget for the Next Year: A Purpose-Driven and Practical Guide

👉 Understanding Your Financial Ecosystem

👉 More articles to identify the financial blind spots

Start Budgeting With Purpose — Free Tools Available Now

Budgeting with Purpose is about more than tracking expenses. It helps you understand your financial reality, identify blind spots, and build long-term clarity.

Two free tools are now available to help you get started:

• Free Budget Tracker

The AfroBudgetinGirl Budget Tracker helps you see your money clearly, plan monthly or yearly, track irregular expenses, and prioritise actions using the Action Priority Matrix.

• 200 Questions Workbook Extract (Free)

Some financial risks don’t appear in spreadsheets. This workbook extract helps you uncover blind spots, understand what’s driving your decisions, and map those insights into numbers using your budget.

The Money Design Session (Coming Together)

These tools introduce the Money Design Session — a practical way to map your financial ecosystem, identify patterns, and strengthen your foundation with intention.

Here’s what to do:

• List every part of your financial environment — from family and work to culture and media.

• Analyse how each one influences your mindset, habits, and goals.

• Identify patterns and blind spots.

• Strengthen your foundation by aligning your money with your true objectives.

This is how budgeting becomes a tool for direction — not restriction.

Want Early Access?

The Budgeting with Purpose Masterclass is in development.

👉 Subscribe to receive:

• updates when the masterclass is available

• practical guidance to live intentionally — financially and personally

Budget for the Life You Intend to Live

I’m AfroBudgetinGirl, and this is my Diary — where every story matters because your story matters.

Through real experiences and true lessons, I help you question, plan, and protect your financial journey.

Budgeting with purpose transforms your money into a tool for independence and peace. It gives you the power to say “yes” to what matters — and the courage to say “no” to what doesn’t.

Because when we plan with purpose, we don’t just survive life’s challenges — we thrive through them.

If this story resonated with you, keep exploring the Diary — there’s more here to support your financial clarity, boundaries, and purpose. Click here.