I can’t think of something more vital to your finances than a budget. Think of it as a roadmap to your success. Telling you which way to turn, and how to reach your destination. Where the hazards are and how to avoid them.
If you want to become wealthy, you must have a budget. Must. You must have a budget. What’s the secret word? Oh yeah, it’s budget. Or is it must? Do I make myself clear?
As clear as mud.
Allow me me to go further.
This is probably the single most important thing you can do to improve your finances. If you don’t tell your money where to go, you are going to end up buying ice cream with your mortgage payment again. So toughen up, sit down, grab the spouse if you have one and get cracking.
You are not going to get it perfect the first month. The first budget is going to be messy. It is not going to come out the way you want. You will always have more things budgeted than your income can support. It is going to cause you to snap that pencil between your money grip of death. Or for those using the computer, possibly short out your keyboard with perspiration. Look on the bright side. Now you can budget in a new keyboard.
If you are married you need to be considerate. This is not the time to bring up and destroy them for spending to much time and money at Kohl’s. True as it may be. Hi, honey!
It is the time to set up and decide on a clothing category though. And if you are the one that wants more in that category, you better be ready to give up a little in another.
The goal is to have all the numbers equal zero. After budgeting all your expenses, bills, and other awe-inspiring items you subtract that from your net income. If you have money left over, then that amount gets budgeted too. You can’t leave it hanging. Give it a job. It could help in debt reduction. Or it could go to savings. Either way, put it somewhere until income minus expenses equal zippo.
What if my income is less than my expenses? Then you either need to make more money or spend less of it. Sorry. The truth hurts.
I don’t care if you use the old pen and pencil or use a computer program. I don’t even care if you chisel it into a stone tablet or use an Etch A Sketch. The point is you must have it down in print.
Personally, I have always been one that actually enjoy budgeting. I enjoy the process. I enjoy charts, graphs and other pretty ways to show me what my money looks like.
For many years I used the old paper and pencil method. It actually works very well, even better than some budgeting programs I have tried. But, I needed a computer program to give me the eye candy I desire.
I was then introduced to Quicken and Microsoft Money. I gave them both a try but they would always have some quirkiness that would drive me cuckoo. There was to much going on. The look was to busy. Things never matched up. I would check my bank statement and then look at the computer and nothing was right. I tried some other software with similar results. I did not last long with these programs.
I then made my own spreadsheet. The way I wanted it. With only the info I wanted to deal with. It wasnt really pretty, but it got the job done. Though it was lacking.
Then finally I found something perfectly fit for me and the way I like to budget. It is a program called YNAB (You Need A Budget). I highly suggest you take a look at it for you own household budgeting needs.
Click the logo to check it out. Wait! Hold up! Not until you are finished reading this article.
It meets all the requirements I was looking for. It is easy to use, nice looking and efficient at organizing your money.
It does one thing very well that I always complained about with other software. It helps you budget for things that are not paid every month.
For example our car insurance is due every quarter. So, the months you don’t pay the car insurance you still budget the amount you would need if you paid it monthly. It then carries that amount forward. When the month comes where you need to pay that bill you have the money set aside and accounted for. This program makes it easy.
Entering transactions is quick and simple. Dare I say… fun?
I really enjoy that on the budget screen you can view past and future months all at once. It makes it easy to compare how you did or how you are going to do in the future.
It has some nice reports. Something to satisfy my desire for the visual.
If you are on the go and have an iPod or similar product you can download the YNAB app. Then everytime you make a purchase you can log it into the app immediately. This saves time and keeps you up to date on the progress of your budget, on the fly. When you get home you can sync up with the computer and everything is accounted for.
I have tried everything, and this is the best. So, seriously. Try it.
Now that you agree that you need a budget, what is stopping you from getting started?
Let me know if you need some encouragement.
We will talk more about budgets another time. There is a lot to talk about!
Remember, the budget is your friend.
The Debt Whisperer
FREE ALERT: Email me the draft of your budget or the completed one and I will give you some tips and/or advice for free.
I would love to hear your comments. Have any budgeting tips to share?
YNAB Photos Attribution