Welcome to the second post of the budget series! In our first post, we began laying our foundation by defining what a budget was, and bestowed a few reasons why it’s crucial to start increasing your financial power level (control).

We’re following that up with common strategies to use when tracking your coins. We rate each budget strategy using the criteria below, talk through commonalities among all strategies, and then provide a recommendation as you begin reaching new authority in your new world!

This post is part two of three in the Budgeting Series:

  1. What is a Budget?
  2. Choosing a Budget Strategy for your world
  3. 6 Simple Steps to Make Your 

Strategy Ratings:

Rating NameDefinitionScaleQuestions
Strength of frugalityReceiving the most return on every dollar spent1 to 5

1 – Does not reinforce or coincide with frugal lifestyle
5 – Reinforces and coincides perfectly with frugality
- Would Mr. Mustachian be proud of this budget strategy? This is the extreme frugal question
- Does it easily show leftover mula and/or returns on purchases?
- Would this strategy create positive reinforcement to live a frugal life?
Ease of implementationComplexity of setting up the budget strategy for yourself1-5

1 - Complicated and time consuming to implement
5 - Easy and understandable with templates to start from
- Account set up? Like bank accounts, investment accounts, etc
- Tools to help? Excel or template or mint
- Time/Guides to set up?
- Time it takes to get the strategy into real life?
UsabilityEasy to use, learn, and manage1 to 5

1 - Very challenging to use and learn
5 - Easy to understand and use
- Learning curve?
- Is it easily learnable or does it take time?
- Simple vs detailed?
- Effectiveness?
TimeAmount of time per week this budget strategy will eat1-5

1 - Very time consuming - 3-5+ hr/week
5 - Doesn’t require much of your time for same results, 1 hr/week
- How often does it require updating?
- How often must I do calculations?
- Are calculations easy?
- How much time is spent on categorizing? Can it be automated
FlexibilityCan I easily change to meet different goals and budgeting needs?1-5

1 - Challenging to change
5 - Easily adaptable to your preferences
- Can I add new categories without a headache?
- Can I easily update percentages?
- Are calculations strictly defined?
- Can I create my own goals?

Commonalities Among Strategies

Planning ahead

  • Budgeting in itself is planning your finances ahead of time and consistently updated to meet your goals. Plan ahead so you can make your retirement dreams into retirement reality.

Estimating and tracking your income

  • Tracking income enables better control over all aspects of your financial life. It’s the bread to your expense butter. Increasing income means increasing savings and investments. Knowledge is power, use your income knowledge to increase your personal finance dictatorship.

Knowing your expenses

  • Knowing the costs of your needs helps determine the opportunities to trim your wants, save for your rainy day, and invest for future endeavors. Income and expenses truly determine your saving and investment rates, without knowing either your monetary policies will struggle.


  • Jim Rohn said that “Discipline is the bridge between goals and accomplishments.” Budgeting visualizes your cash flow and grants flexibility to define your goals. Meeting those goals requires discipline.
  • The strategies below rank in frugality, this will help you determine if the strategy helps develop or destroy the bridge to your accomplishments. Most importantly, a quick reminder that no matter the strategy, the most important tool is you. Be disciplined!


  • With strong discipline, you will hit financial milestones. GREAT! Now celebrate it!! Take a trip, buy yourself a new gadget, or cross off a bucket list item.
  • Appreciating yourself and others, practicing gratitude, and enjoying life ADD to the benefit of being financially responsible. It provides the purpose we need to continue taking steps over the mountain towards happyness!

Define goals

  • A budget gives you the intelligence you need for your current financial situation, giving you command to define realistic milestones for your kingdom. A few examples: maxing out your IRA, building your emergency fund, or paying off your debt.  As newly ascertaining dukes, budgeting will give you the Kodak moment of your money, continue following along and we will help you define milestones!


Subtraction Budget Strategy

  • Strength of frugality 2/5
    • Easily see and make decisions on where to place positive cash flow
    • Easy to change, easy to increase money dedicated to goals
    • No positive reinforcement to spend money in a specific way
  • Ease of implementation 5/5
    • Can be implemented with pen and paper, or new tech tools if preferred
    • List income, list expenses, minus expenses from income to see cash flow
    • Doesn’t require extra time for account set up and many templates exist
  • Usability  4/5
    • No problem to learn, manage, and understand
    • Can be very simple or detailed with high or low level categories
    • Effective to dictate your money decisions
  • Time 4/5
    • Time can be reduced with simplicity
    • Can be automated using tools like Excel or Mint for updates / categorization
    • Requires time to categorize and re-evaluate money placement
  • Flexibility 5/5
    • Easily adapt this budget strategy to your taste. Choose your categories, your tracking methods, and calculations to track
    • Can adjust amounts for saving goals as needed, change categories to fit your needs
  • Overall Score: 20 of 25 = 80%

A calculator sitting on an open notepad with writing on it.


Subtraction budgeting conceptually is very easy to understand. It requires two steps. One, sum all of your income, and two subtract all of your expenses, savings, and investments.

Categorizing helps us better understand our spending/saving. Subtraction can be the simplest (KISS principle) strategy depending on how you choose to implement it. High-level categories such as entertainment, or low-level categories such as movies, books, or bars change the amount of effort required.

Tools can really help make the categorization easy and 90% automated, making this a go-to choice for many people.

Cash Budget Strategy

  • Strength of frugality 5/5
  • Ease of implementation 5/5
    • Doesn’t require new accounts to be set up
    • Tools can still be used to help with amounts, but taking cash and organizing is up to you
    • There are many guides on implementing cash budgeting (we will go through these in post 3 of the series)
  • Usability  5/5
    • Easy to understand and learn
    • Simple or detailed categorization can be used, although we recommend simple due to time
    • Undoubtedly effective for enforcing your budget pools
  • Time 1/5
    • Requires weekly updates to track spending and next month’s amount for categories
    • Calculations for spending vs income must still be done, so double whammy time effort for cash appropriations and categorizations
    • Cannot be fully automated
  • Flexibility 5/5
    • Very flexible in how you implement the tracking, only restriction is using cash to pay.
    • Update amounts and percentages as needed for your situation
  • Overall Score: 21 of 25 = 84%

US cash rolled up with president faces facing forward.


Cash budgeting requires two tasks. One, implementing the subtraction strategy to create budget buckets. Two, only pay for categories you choose in cash.

We favor this strategy for those who struggle with credit card spending and discipline. It can be used as a first step towards budgeting as it positively enforces and separates budget restrictions to build the discipline of a duke.


Proportion/Percentage Budget Strategy

  • Strength of frugality 4/5
    • Mr. Money Mustache would be proud of you using this strategy if you choose high percentage of savings and debt payoff
    • It is not easy to see exactly how much you have left over in this strategy, you must choose percentages that allow you to meet your needs based on your pay
    • This can reinforce your savings goals as the percentage saved directly relates to your financial freedom timeline
  • Ease of implementation 2/5
    • Account set up would be recommended for automating different percentage allocations
    • There are templates for this available, commonly referred to as the 50/30/20 strategy. We believe percentages can be flexible based on situation
    • Creating percentages still requires you to implement subtraction from income with bills, then additional effort to declare percentages that challenge your spending levels
  • Usability  4/5
    • Easy to understand and learn from a conceptual perspective
    • Overall pretty simple, there are not many categories for each line of money spent
    • This can be an effective way to budget if you are paying yourself first, with the caveat that you must KNOW that you can pay your needs and control your wants each month
  • Time 4/5
    • Requires weekly updates to track spending and
    • Calculations for spending vs income must still be done and categorized, then percentages must be verified for your goals from the first calculations
    • Can be automated to an extent as there are not as many detailed categorizations
  • Flexibility 4/5
    • Percentages are flexible for you to decide on the three categories: needs, wants, savings.
    • Update amounts and percentages as needed for your situation, only 3 categories means specific changes can be challenging.
    • Saving and investing goals can be directly implemented in your percentages. Beware that choosing percentages that don’t meet your goals is totally possible, meaning you can spend more on needs instead of converting to more savings as you hit set percentages. This can be OK depending on where you are with your kingdom.
  • Overall Score: 18 of 25 = 72%

A pie chart with three equal pieces for budget categories.

Proportion budgeting means to categorize your spending in three ways: wants, needs, and saving. It creates a very simple budgeting picture with easy categories to prioritize your spending into. In combination with cash flow or subtraction, it can be an additional motivator to increase your savings, and accelerate your financial independence age!!

Cash flow Budget Strategy

  • Strength of frugality 3/5
    • Being able to see “leftover” money lets you quickly put that money to work
    • There’s not a lot of psychological reinforcement to keep you on track
  • Ease of implementation 2/5
    • Easier because there’s a template, but you still need to calculate your paychecks (hourly/salary) and estimate your bills in the correct timeframe.
    • That includes variable and infrequent bills like auto insurance or property taxes, meaning it requires future-oriented estimations that can be challenging for some!
  • Usability  3/5
    • If you’re good with Excel, this can go all the way to 5/5 easiness.
    • If you’re not good with Excel and not willing to learn, look elsewhere for a more suitable solution.
  • Time 4/5
    • Plan to update roughly every 2 weeks, about 1 hour per update for a budget of average complicatedness.
  • Flexibility 5/5
    • Whether you’re just starting out or a multi-millionaire, this budget will work for you. There may be no better approach for those inevitable curve-balls in life, such as hospital bills, a big gift from blessed Aunt Susie, or ‘WOOPS! We’re pregnant, now what?!” The ability to move money around in time gives you great power.

This option is perfect for Excel ninjas. Based on a single primary checking account – hopefully, one earning interest; try a credit union – the budget lines up your incoming and outgoing cash flow chronologically.

It simultaneously lets you set spending goals and balance your checkbook. When unexpected expenses occur, its true power shines, as you can easily move expenses around in time to make room for the expense. Combined with judicious use of rewards and 0% credit cards, this strategy enables you to pull many financial levers to get ahead in life.

Our Recommended Budget Strategy:

The best strategy for budgeting is one that works for you. Take the bits and pieces from the strategies above, adapt them to your preferences, and constantly iterate to track progress during castle construction. If you notice you need more discipline than use cash. Spend a lot of cash? Use credit cards and reap their rewards instead. Money is your tool. When employed efficiently, it will open the world to you!!


The globe with a focus around indonesia and the equator.


Building a financial kingdom will be your own personal journey, we want to help you on the way to becoming a Master Duke! You have finished post 2 of 3 in our series. Have another budget strategy? Let us know in the comments below.

Lastly, come back and see us post numero tres. We will walk you through the implementation of each strategy above!