Three ways to budget. Which one works for you?

There is no “one size fits all” budget, which is why I’m highlighting three very different budgets below. One focuses on paying off debt, a second provides a comprehensive approach to managing your money, and a third budget is a stripped down system that takes 15 minutes to create, start to finish. Which one works for you?

The Get Out of Debt Budget

Personal finance guru Dave Ramsey has a theory about paying off debt that focuses on small successes to create momentum, instead of merely focusing on paying off your highest interest debt. Using his plan, you pay minimums on all loans except the one with the smallest balance. Knock that one out, pat yourself on the back, and move onto to your next victim. As you score knock outs, increase the dollar figure you are paying towards debt each month, building momentum as you approach your last and final challenge.

While Ramsey’s plan is mathematically counter intuitive,it has worked for scores of folks. And in the end, if you pay a bit more but end up debt free, isn’t that better than remaining in debt? The downside is that Ramsey’s Gazelle Budget software costs $10 per month or $90 if you prepay for an entire year. Start with a free seven-day trial to decide if the program works for you.

The All In One Budget

Four million people use Mint.com and there is good reason why. Full disclosure: Mint.com is a past advertiser. The free site lets you sync your bank account, credit cards, mortgage, and IRA for a holistic and detailed approach to managing your money. With a few clicks you can see your account balances, learn how much each account has grown or shrunk, and check how much remains in each category of your budget.

Download Mint.com’s app for the iPhone or Droid and check in whenever you want. (Do you use online financial tools? Vote here.) The site automatically categorizes your purchases and presents the data as a pie chart so you can see exactly where you are going overboard. That makes it easier to target cutbacks. Mint.com will also recommend changes you can make to save money and spend less. The site was such a hit with consumers it was acquired by software maker Intuit in 2009.

The Minimalist Budget, aka The I Don’t Have Time to Budget, Budget

I created this 15 minute budget when I was faced with a severe reduction in income. (See this budget explain in a video). Unsure if I could continue my current lifestyle, I parsed my spending into two basic categories. The first, bills I had to pay to keep a roof over my head and to avoid breaking contracts, with say, AT&T Wireless. The second category included expenses I could avoid if need be, like restaurant tabs, air travel, and mall splurges. Because my remaining income was steady, I added up my first category of unavoidable bills and subtracted it from my income.

What was left – my flex dollars – had to cover everything else each month, including gas and groceries. To track my spending, I grabbed an index card and jotted down my total flex dollars. I subtracted purchases as I made them, then returned the card to my wallet. This two-tier system encouraged me to stretch my flex dollars each month because the savvier I was, the longer the money lasted. The index card was a constant reminder of how much money remained, keeping me on my toes.

Whatever budget you try, remember you can change it to fit your needs.