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Find the Right Budgeting System for You


It is one thing to sit down and write down your budget on a piece of paper and another thing to execute it successfully. If you feel like you have a workable budget, but you have problems executing it each month, then you may need to rethink your budgeting system. YOu need to understand your budgeting style to find the best system for you. A budget needs to be tracked every day, so you know how much you have left in each category at all times. There are several tools you can use in conjunction with each other to make tracking your spending easier. Once you set this up it will be easier to analyze your budget to make sure it is helping you reach your financial goals. It will also help you identify any budget busters you may have so you can correct them.

1. Online Budgeting System

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An online budgeting system will download all of your transaction from your banks and begin to categorize them for your. Some of the programs charge a fee, but Mint.com offers this service for free. 


  • Accessible from multiple computers
  • Updates automatically
  • Easy to track


  • The software may put the transactions in the wrong place
  • May not be hands on enough when you first start budgeting
  • May not balance your checkbook


2. Computer Software with Phone Applications

There are several computer software programs that will track your spending and balance your checkbook at the same time. These programs stay on your personal computer, and usually work with just one computer. Many of them have phone applications that allow you to sync the budget with your phone so you can check your budget and enter new transactions when you are out shopping, but the sync is usually done manually.


  • Does both budget and balancing your account
  • May update automatically
  • Easy to track


  • The software may put the transactions in the wrong place
  • May not be hands on enough when you first start budgeting


3. Paper Budgeting System

An old-fashioned budgeting system may be the best for you. This one where you write down each transaction and subtract the amounts as you spend them. You can carry a small notebook or do checkbook inserts s suggested in Rich on Any Income that you carry with you from store to store or do the budget at home each night. This system may work well when you first begin budgeting or if you are budgeting with a spouse and you need to communicate about your spending since it lets you see where you are each night. You must do this budget every day in order for it to be successful.


  • Good hands on intensive process
  • Encourages communication between spouses
  • Good for beginning budgeting


  • Time intensive
  • Easy to make errors

4. Envelope Budgeting System

An envelope system or cash only budget may be the best budget option for your current needs. In the envelope system you use an envelope for each category, and then pull out cash and place the correct amount for each category in the envelope. You do not need to add the figures, and simply check to see if you have any money left in the envelope when you want to spend money. This is a good system for people who hate adding and dealing with the money on a regular basis. You cannot use your debit card or credit card to make purchases or this budget will not work.


  • No adding or subtracting
  • Easy to stop spending when you run out of money
  • Easy to track


  • May not be practical for all budget categories
  • Some people do not like carrying all the cash around (You may want to try using Google Wallet if this is an issue for you.)

5. Combine Budgeting Systems

The best way to make your budgeting system work for you is to identify the areas you struggle and then find a combination of budgeting methods that solve that problem. For example my family uses a combination of Mint.com and an envelope budgeting system for our problem categories, which are groceries, entertainment and household expenses. This means that my husband and I can monitor our overall spending from wherever we are, and we have automatic limits put in on the categories where we have a difficult time making it work. We also use a money program to balance our checkbook. You may want to implement the zero dollar budget rule as well as the 50/20/30 philosophy when you first set up your budget. 


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  4. Money in Your 20s Basics
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  6. Setting Up a Budget
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