White Mountain Woman

The Best Budget System For You

November 10, 2016 Comments Off on The Best Budget System For You

Finding a budget system that fits your family’s needs is comparable to finding the right pair of shoes. There are a lot of really good products out there, but your needs are specific to you.  The right shoe for your neighbor might not fit you properly, and the right budget for you may be completely different than your friend’s.  So how do you find a budget that fits your needs, is easy to use, and helps you to accomplish your financial goals?shoes

This process is actually a lot like our shoe buying example, you might have to try a few on for size to see what works. A paper budget is a great way to see how your finances will perform over a span of time.  But it doesn’t work so well for knowing where you are day to day.  An app on your phone works great for tracking everday expenses, and it’s really useful if you and your significant other are synced so that you both know where your finances are at any given time.  But it’s a little more difficult to see your progress over time.  You might want to use a combination of methods.

There are a multitude of different types of “cash systems”, where you have a certain amount of cash set aside for each budget category. I like using cash because when it’s gone, it’s gone.  Cash gives you a better sense of how much money you can still spend, and it is easier to stick to your hard budget limits, as opposed to swiping your debit card.  It’s also really easy to underestimate your spending when you are swiping your card and keeping a tally in your head.  I like the small notebooks that have space for cash, they don’t take a lot of room and are a little easier to use, especially if you’re lugging groceries and a toddler around.  But you can simply make your own envelopes as well; look at your options and see what feels the most comfortable.

phoneEven if you are using cash, it helps to have at least an app where you can get a quick visual on where your spending is at an any given moment. And of course, you and your spouse can both know where your finances are at, because living by a budget and becoming debt free is a team sport.  My suggestion is to download a free app that is seems like it will fit your needs.  Don’t buy an app at this point because we are still “trying on”.  Even if you find one that you love, I would try to stick with free.  Often the upgrade you get by buying isn’t something that you really need, and remember, we are trying to pay off our cars, credit cards, student loans, homes, etc. and we need to save money everywhere we can, so if you can get by with the free version, do it.

I would also suggest having some kind of budget that gives you a long term outlook. You can either do this in Excel or another spreadsheet type program, or if you already have something like Quicken you can use it.  Again, try to use what is free because we are saving money.  Even a sheet of notebook paper will work.  Try not to make this overly complicated or you will spend a lot of time setting up something that you won’t use.  It should be fairly basic and simple, with your monthly expenses, along with a list of what you are paying off.  What this extended budget will do is give you a visual of your debts being paid down, and seeing this progress helps you stay motivated over time.  And let’s face it, it can be hard to stay motivated in the beginning.


Remember to keep a long term outlook


Remember, try some different methods out, and don’t be afraid to discard what isn’t working for you. The only way you are going to be able to use your budget as an effective tool is if it is handy and convenient for you.  Just jump in there and get started!


November 10, 2016
November 19, 2016



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