For the next month the weekend challenges are going to focus entirely on budgeting. Although we have already covered the basics in budgeting, this is such an important part of getting control of your finances that we are going to spend some extra time focusing on it. Budgeting is the key to managing your money. It allows you to determine how much to spend and when to spend it. If you can manage your budget successfully each month, you will be able to reach your financial goals. The challenge this week is to find a budgeting system that works well for you.
The truth is that there are a lot of different budgeting systems out there. You can do your budget online, on your smart phone, switch entirely to cash or keep track of it with a pen and paper. You can create your own spreadsheet or keep your money in jars. The most important aspect is that you start with a budget. This means you have a solid plan on how you are going to spend your money. Each dollar should have a specific place to go. If you have been following the weekend challenges, you should already have a written budget to use. Your budgeting system helps you to track your spending.
Look at the reasons that your budget has not worked in the past. Do you have a difficult time tracking your transactions every day? Do you hate entering figures into your computer at the end of the day? You have two solutions to this problem. The first is to switch to a cash budget and use an envelope system where you divide the money into envelopes at the beginning of the month. When you run out of money, then you stop spending. The other is to use your smart phone to enter your transactions in your budget as you make them. This only takes a second at the register, and you will have done most of the work for your budget already.
If you are interested in using a computer program or an app for your budget, you have a wide variety to choose from. Many of the programs now have apps for your smart phone that make it easier to manage your money. The programs will download transactions for you and help you to track your spending. It makes budgeting easier, but you will still need to check in a few times a week to make sure that you have control of your spending.
Some people find more success by combining different budgeting systems. For example, they may switch to cash for their problem categories, but use software to track their spending that happens online or through their checking account. This allows you to target the areas where you need help to stop spending. It also makes it easier to pay for things that you buy online and to pay your bills with your checking account. If you do a partial envelope system, it is important not to cheat on the categories where you have problems spending money. Do not take your debit or credit cards with you when you go shopping to prevent you from being tempted to use it when you find a deal that would push you over your limit.
When you first begin budgeting you will need to track your expenses every day. It does not take long to log on to your bank account, and check to see what items have cleared, and then look at the totals in each category. This is especially important if you are married, because you may be spending out of the same categories. It helps to be accountable to someone if you have spending issues. Your spouse makes an excellent accountability partner. If you are single, a friend can be a great person to report to every few days on your spending progress. If you are really struggling, you may consider taking a personal finances class that focuses on mastering your budget. Churches, banks, employers, and community colleges all offer classes on budgeting, and you can find one close to you, in a setting that you are comfortable attending it at.
Once you have found a system that really works for you, then you will find budgeting a lot easier. Many of the budgeting programs offer a free thirty-day trial, so that you can see if their system works for you. You may want to try out a few of the options, so that you can really find one that you can use easily and that tracks your spending. Many of them also offer tutorials and help desks. Take advantage of those resources, so that you can master the most important aspect of your finances, your budget.