How to Create a Budget When You're Already Broke
5 Types of Budgets (And Which One Works Best)
Let’s be honest—budgeting when you’re broke feels impossible. How can you manage money when it feels like there’s nothing to manage? The truth is, you need a budget the most when money is tight. A good budget gives your money purpose, power, and direction—even if there’s not much of it.
Whether you’re living paycheck to paycheck, drowning in debt, or just trying to stay afloat, this guide will show you how to take control of your finances and choose a budgeting method that actually works for your life.
Step 1: Start Where You Are—Not Where You Wish You Were
Before we get into the 5 types of budgets, you need a clear picture of where your money is right now. Don’t skip this. You need to be honest—not ashamed.
Ask yourself:
How much money do I bring in each month?
What are my non-negotiables (rent, food, utilities)?
What are my debts, subscriptions, or habits that are draining my money?
What expenses can I reduce, pause, or cut out?
✨ Tip: You don’t need fancy apps or spreadsheets. A notebook and a calculator work just fine.
Step 2: Know Your Numbers
Once you’ve tracked your income and expenses, subtract the expenses from your income. If the number is negative, you’re spending more than you make. If it’s close to zero, you’re one small emergency away from a crisis. Either way, a budget is your way forward.
Now, let’s look at five types of budgets—and how to know which one is right for you.
1. Zero-Based Budget
With this method, every single dollar has a job. You assign all your income to categories like rent, food, gas, savings, and even fun—until your income minus your expenses equals zero.
✅ Best for: People who like structure and need to tell every dollar where to go.
⚠️ Not great if: Your income changes a lot or you hate tracking every penny.
2. 50/30/20 Budget
This method splits your income into:
50% Needs (rent, groceries, bills)
30% Wants (dining out, hobbies, subscriptions)
20% Savings and Debt Repayment
✅ Best for: Beginners or people with steady income who want a simple formula.
⚠️ Not great if: You’re behind on bills or can’t cover your basic needs with 50%.
3. The Envelope System
This old-school method uses physical cash in labeled envelopes for categories like food, gas, and fun. When an envelope is empty, you’re done spending in that category.
✅ Best for: Overspenders who need to physically see limits.
⚠️ Not great if: You do everything digitally or hate carrying cash.
4. The Paycheck Budget
You create a mini budget every time you get paid—assigning money to expenses based on what’s due between now and the next paycheck.
✅ Best for: People who live paycheck to paycheck or have irregular income.
⚠️ Not great if: You forget to plan ahead for monthly or annual expenses.
5. The Priority-Based Budget
This is the “survival mode” budget. You cover needs in order of importance:
Food
Shelter
Utilities
Transportation
Minimum debt payments
Everything else waits.
✅ Best for: When you’re broke, behind, or in crisis.
⚠️ Not a long-term plan—but a powerful short-term tool to get you stable.
So… Which Budget Is Best When You’re Broke?
If you’re broke right now, start with the Priority-Based Budget to stop the bleeding and stabilize. Once you’ve got the essentials covered, shift to the Paycheck Budget so you can plan each check before it hits your account.
As things improve, you can move into the Zero-Based Budget to build wealth, save, and crush debt with precision.
Final Thoughts: Budgeting Isn’t Restriction—It’s Rescue
You don’t need to be perfect. You don’t need to do what everyone else is doing. And you definitely don’t need a lot of money to start budgeting.
You just need a plan—and a reason.
Whether you’re barely scraping by or starting over, a budget gives you the power to take control, instead of letting your money control you.
Want help creating your first budget?
👉 Book a free Snapshot Session and let’s build a plan that actually fits your life.
You’re not alone—I’ve got your back.