budgeting methods

There is not a right way to budget. There are many different methods. The most important thing is that you have a budget. Here are some possible ways to budget:

Use a computer program - There are several commercially available budgeting programs that can hold your hand through the process of creating a budget. Quicken & Money seem to both have the weakness that budgeting seems to happen after you've spent your money. Unless you're creative it is also difficult to carry money over in different categories from month to month.

Use a spreadsheet - I've never done this. But it's the method that many use in order to easily carry overage amounts from month to month.

Use a notebook - This is the method modeled by my parents. It is essentially like using a spreadsheet, but you are doing all the calculations. No need for computer skills with this method.

Use cash & envelopes - Distribute budgeted amounts of cash into category envelopes. You can determine how much money is available throughout the month by counting what is left in the envelope. This method is tricky for those who use bill pay, don't like having a lot of cash on hand or enjoy earning rewards on an always-paid credit card. There are computer programs that mimic this concept, but do it virtually (and reduce the disadvantages listed above). I am currently researching these programs.


Tara said...

I tried MANY MANY MANY methods of keeping track of a budget, but Quicken has really helped me since it automatically uploads purchases as I spend them. Pretty neat!

Vickie said...

Most of my bills come in the same each month and are allotted for in the budget. So to simplify my budget I carry a small paper where I tally the grocery/perishible purchases for each month. Then I just stop shopping when I get to my monthly allotment. This is a good way for me since I put everything on my credit card and then pay the balance in full.

Anonymous said...

Many years ago when I was in the military we got our meager pay twice a month. We would go buy a two week supply of food, fill the gas tank and pay what bills we could. If there was money left over we might go to dinner or a movie. I actually used this method for years even as I moved on to better paying jobs. However I would have a substantial part of my income sent to the bank for savings. By continuing to live like a pauper (well maybe a little bit better then some low level GI) I saved a lot of money. I bought my first new car for cash after driving used cars I bought for $50-$500 each time. I was so excited I wrote the check wrong. Budgeting is hard and saving is harder but if you have the savings taken out before you get your check it becomes easier.

Wendy said...

Great comments and suggestions! Thank you for taking the time to share.