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Have you ever started a budgeting system only to give up on it after a while because it was complicated or frustrating? I have ditched a few myself.
The trick is to find a system that fits you and your lifestyle. What’s easy for you to maintain and follow? So, what budgeting systems and tools are out there for you? Let’s look at 7 of them.
1. Budgeting Apps
With all kinds of apps available for every need imaginable you know there’s bound to be many apps for budgeting too. But which one is the best (and safest) to use? I’ve listed the top 5 budgeting app out there.
- EveryDollar – Has a very simple layout and easy to fill out screens and they claim you can create your budget in just 10 minutes. They even give percentages of how much of your budget was spent on each category.
- Mint – Is pretty well known and for good reason. You can connect to a multitude of financial institutions including your credit cards, brokers, and lenders. Mint automatically categorizes transactions and tracks them against a budget you’ve set. You also get alerts when you go over budget and watch where your money goes each month.
- Mvelopes – If you follow Dave Ramsey’s envelope system, this app would work for you. Not only do you get a budgeting system, but an online learning center as well as a personal finance trainer as well.
- GoodBudget – This is a great budget for couples to share. It’s similar to the envelope system but you can share and sync budgets with your partner to stay on top of each other’s spending.
- Wally – Wally isn’t the easiest app to navigate compared to some others on this list, but it works well for one thing: budgeting. It helps you track your income, expenses and offers you a snapshot of your remaining budget to help you avoid overspending.
For more budgeting apps you can read 16 Free Budgeting Apps to Help You Stay on Track.
2. Pen & Paper
Are you the more “hands-on” type and prefer to see and follow your money closely? The pen and paper method may be best for you.
Start with buying an accounting ledger and your “opening bank balance”. You then enter each credit and deposit on every line and subtract or add it to your running total.
The ledger that comes with your checkbook can help you while out of the house. I’ve added an example:
Here’s how it works:
- In your ledger start with an opening balance of the amount in your bank account (preferably one that is clear of any outstanding debts).
- Write down every transaction that happens. Bought groceries, log the amount in the debit column and deduct it from the balance. Got paid, log the amount in the credit column and add it to the balance.
- Have separate pages for each of your expenses (even the automatic payments) and write in all the debits as they occur during the month and at the end of the month you’ll have a final total for that month.
- After a few months, you’ll see how much you’re actually spending and can decide where to cut back or set a monthly limit on each page of your expenses.
- Refine the limits every few months to optimize your savings.
You don’t need to be an accountant to understand this system – it’s all addition and subtraction really.
The second option is to create a budget on a spreadsheet program like Microsoft Excel. If you don’t have Microsoft Office, save yourself $134 and use a free version such as OpenOffice by Apache, or Google Spreadsheets.
A bonus is that many of these programs already include budget templates for you to start with. These templates include the formulas needed to automatically add and subtract from each associated group you are working on. So, much of the work is done for you. At the end of the month, these spreadsheets can show you pie charts of where your money is being spent.
Other options in these spreadsheet programs is that you can set a monthly amount and the program will calculate how much you have left for that month, so you can actually see a running balance on your grocery spending limit for example.
This option is less time consuming than the pen and paper version but may be tricky to set up in the first place if you’re not tech-savvy with the program.
Quickens is a software program specially made for budgeting. You have two options with this program, enter every transaction yourself, or link all your bank accounts into the program.
Quickens lists every transaction as well as categorizes them and you’ll see all your spending instantly (if you went with the auto-linking to your bank). You’re able to make a monthly budget plan and track it all month. You can even track and pay your bills automatically and Quickens can even project your future bills as well.
They can connect to over 14,000 different banks and over 11,000 creditors for your bills.
This option may be easier for more people to use than the spreadsheet option. The drawback – having to pay abut $60 for the software.
5. Budgeting Workbooks
Maybe apps are too technical for you, or all the accounting jargon goes right over your head, not to worry there’s still a way for you to create a budget with books and their related workbooks.
Reading self-help books and following along with a workbook may make things easier to accomplish. Here’s 5 books and workbooks to show you step-by-step to budgeting:
- How to Manage your Money When you don’t have Any: Both the book and workbook will show you hands-on ways to make good decisions with confidence. Full of current everyday references and “jargon-free” and a quick read for those struggling to make ends meet.
- Financial Peace – This is written by Dave Ramsey and is updated with more chapters. The book guides you through step-by-step on getting out of debt, budgeting, planning for the future and more. Use the workbook to follow along and prepare your own budget plan.
- The Motley Fool Personal Finance Workbook – This is an all-inclusive workbook that will help you create a budget, get out of debt and how to set priorities. This book claims to “show you exactly where you stand right now and the most direct path to where you want to be”.
- Money Matters for Teens Workbook – Get your teens off to a good financial start by giving them this great and easy workbook. Help them find ways to earn money with odd jobs, pay fair prices for things, avoid being ripped off, and create savings goals.
- The Budget Kit: The Common Cents Money Management Workbook – The author of this workbook shows you straight forward and easy steps to get your spending under control and reach your financial goals.
6. Take a Budgeting Class
If books and apps are not your thing, you can always opt for classes. Many classes on budgeting can be very beneficial and you have the hands-on experience as well as having any questions answered by the instructor.
Here are several ways to find a budgeting class:
- Your local Community College – Look at your local community college offering community courses in budgeting. Many are very low cost, are offered after work hours and are short-term.
- Budgeting 101 – This is a free online course offered by credit.org. First, you start by answering a few questions on what you know about budgeting and then follow the course step by step on budgeting, savings, setting goals, and more.
- iTunes U – Missouri State University offers a full-scale personal finance course via iTunes U that’s presented in a video format. There are eight classes, ranging in time from 20 to 40 minutes and covering the basics of personal finance.
- Udemy – There are a lot of courses on budgeting on Udemy that are either free or low cost. Such as this Learn how to Budget – Personal budgeting made easy that is usually $24.99 but you can wait for one of Udemy’s sales and grab it at $9.99.
7. Hire a Professional
If all else fails or you just don’t have the time and energy to wade through all your paperwork, hiring a professional to do it for you would be an option.
You don’t need to be wealthy to hire a financial advisor and many counseling and budgeting services are offered for free, or for a low price. Here are several places you can find one:
- Your local Community Action Agency – Many of these agencies offers free budgeting and credit repair help. If you and your family earn less than $45,000 a year also qualify for free income tax returns with electronic filing.
- The National Foundation for Credit Counseling – They list credible credit and debt advisors in a variety of categories such as housing, reverse mortgage, debt management, student loans and many more.
- Hire a Daily Money Manager – Yep, there are professionals that will take care of everything for you. There’s even an Association – AADMM: The American Association of Daily Money Managers. Now, they’re not strongly regulated by any government body so I’d heavily check references before jumping into this. But it’s there as a choice for you.
- Hire a Money Coach – Money coaches work with you one-on-one to create budgets and financial advice to fit Which is great because finance books and videos tend to be too generic and may not fit your unique situation. Again, do your research on their background before hiring.
Lastly, don’t forget to look on Frugal for Less for other articles, such as these:
- Budgeting for Beginners: 11 Steps to Building a Better Budget
- 15 Easy Ways to Improve Your Finances
- How to Handle Money in a Relationship
- 10 Best Financial Tools to Make Money Management Easy
- 13 Best Free Financial Planning Tools to Get Your Cash on Track Fast
I wish you good luck on getting your finances on track and working towards being debt free.