One of the main ways to keep track of your finances is to have a budget. A budget is a blueprint for your money. With a budget, you tell you money what to do instead of your money telling you what to do. Below are 10 tips to budgeting and budgeting tools.
1) In order to set up a budget, you need to know how much you have coming in and how much you have going out. If you don’t know what is going out, it may be helpful to track your expenses for at least a week, or up to 30 days. Then you can see how much you are spending in different categories and if there are any expenses you can cut back on.
2) Envelope system – One way to stay on budget is to put the budgeted amount for different categories (such as groceries, clothing, dining out, etc) in separate envelopes either once or twice a month. Once the money is gone you are done spending for the month. If you need more money, you take it from another category which makes the spending in that category less. Here is an example of the envelope system.
3) The Total Money Makeover by Dave Ramsey is a good resource on budgeting and includes budgeting forms. Dave’s Financial Peace University program is also a great resource. It is a 13 week course that meets one night a week.
4) Mint.com is one of the many online budgeting systems. It is free to use and it keeps track of your spending by category. I have not used it but have friends who have. They were surprised how much they were able to save by tracking where their money was going.
5) Here is a resource that shows how cutting back on expenses can add up.
6) There are numerous apps available for mobile phones to track your expenses.
7) Mvelopes is another free online budgeting system. There are a number of different resources available. It is important to find the system that works for you so that you will continue using it.
8) Here is an example of an excel sheet budget. As I mentioned above, it is important to find a system that works for you.
9) When setting up your budget and are determining your monthly expenses also keep in mind expenses that occur throughout the year. Besides the expenses you have each month there are other things that come up such as insurance costs quarterly or semi annually and also gift expenses throughout the year.
10) Holiday budgeting – earlier in the year, make a list of people you are planning on purchasing gifts for and a budgeted amount. Also make a list of additional holiday expenses such as party expenses, wrapping expenses and extra eating out, etc. Add the total of these two lists together and divide the amount by the number of months you have left to see how much you should try to budget each month. By budgeting ahead of time you may be able to relieve yourself of some of the holiday stress.
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