Creating a budget can often be daunting. You likely want to develop new money habits and feel like you’re in control of your finances. But doing it on your own can cause anxiety and leave you feeling defeated before you even start. Instead of feeling down about your budget, find some tools like budgeting apps, spreadsheets or even features offered at your bank to help you keep track of your money. You don’t have to do everything on your own. Using budgeting tools will offer less hassle and let you keep working toward your financial goals.
Why are budgets hard to stick to?
Budgets can be hard to stick to, especially if you feel there is only one way to manage your money. Before you beat yourself up about falling off the budget wagon, remember that life-changing tools for one person might be a total disaster for someone else.
Much of budgeting is finding what works best for you and your situation through trial and error.
It can be tempting to think of a budget as something you do once and then rigidly adhere to for the rest of your life.
Instead, think of your budget as an extension of your life, which will grow and change just like you. The money strategies that worked for you in college will likely not work when you have two kids and a full-time job.
Pick the right budgeting tool for the job
As you think about the things that haven’t worked in the past, consider other areas of your life that you also have to manage, like grocery shopping.
Are you a hands-on person who likes to pick out each stalk of asparagus every few days? Or do you want to stock up using the store app twice a month and have someone else do the actual shopping?
There is no correct answer to grocery shopping, and there are no right answers to budgets either. You can be hands-on and manually enter your transactions, or keep it low-key and just do periodic check-ins after the initial setup.
These are the best budgeting tools
Multiple free or low-cost budgeting tools can help track your spending and keep your budget strong.
Apps are great budgeting tools. They provide a ready-made structure that you can use to manage your finances and take your budget with you.
Many apps link to your bank and investment accounts and download transactions automatically. You can sort your transactions as needed and create rules to automatically categorize repeated transactions, making apps a relatively hands-off tool.
Possibly the most well-known budgeting app available, Mint is excellent for beginners. You can keep all of your finances in one place, including your investment accounts, customize your budget categories, set goals and see your credit score and a credit report summary.
Mint will show how your spending has changed monthly or yearly. It can also be a good way to visually track what you have coming in and going out each month. Although Mint is free, it does have ads and will make recommendations on products based on your information, like finding the best high-yield savings account for your emergency fund.
You Need A Budget (YNAB)
YNAB is another great budgeting option, although it has a subscription fee of $14.99 a month or $99 a year after a 34-day free trial.
YNAB helps users determine their immediate, middle and long-term priorities and save for them accordingly. It also lets you customize your categories, set goals and attend workshops to help you learn how to budget and manage your money effectively.
The Personal Capital app will import transactions and help you categorize expenses, but it excels at helping you manage your investment portfolio. The app and some of its investing tools are free to download, can help you learn about hidden fees you’re paying on your 401(k) and offers an investment checkup tool. Personal Capital also offers an option to add investment management services for a fee.
The budgeting features of this app aren’t as robust as others. But it can help users calculate their net worth, create a savings plan and it even offers a retirement planner.
You may be familiar with spreadsheets from work or school, but they can also be powerful tools for budgeting.
Since you have to input your transactions manually, spreadsheets are a very hands-on method. They are highly customizable but also require the most time to maintain.
Both Google and Microsoft offer free budgeting templates as part of their suite of office tools. If you’re a spreadsheet wizard, you can create your own formulas, but the templates provide a great jumping-off point.
One of the benefits of a spreadsheet is that you can customize and edit it to fit your life. If the standard templates don’t meet your needs, there are free or low-cost budget templates available online that come prepopulated with formulas and formatting.
The envelope method
Want to set up an envelope system for your budget? Put cash into envelopes labeled for each expense, like your rent, groceries, utilities, entertainment, miscellaneous and any recurring payments you have.
Use the cash in the envelope to pay the intended bill. Once that money has been spent on its purpose, there isn’t any more. This method is excellent for ensuring you don’t overspend since you can only shop (or pay bills) with the cash in hand. If you go over, you have to remove some money from another envelope to cover the cost.
Using this technique with a spreadsheet or one of the budgeting apps above can provide insight into your spending habits and help prevent impulse shopping.
Consider digital envelopes
If physical envelopes sound like a chore to maintain, check out the Goodbudget app. This virtual envelope system is free, with up to 20 envelopes for your budgeting needs. If you need more than 20 envelopes, an upgrade to unlimited envelopes is available for $8 a month or $70 annually.
You can download and import your banking transactions into Goodbudget, or manually enter your numbers, which forces you to think about your spending. Although you won’t have to manage physical cash, Goodbudget lets you see where your earmarked money is going, just in a digital space.
Most banks offer tools to help you manage your personal budget. You can often track and categorize your expenses, run reports to see how your spending compares to a previous month or year, and export data into a spreadsheet or budgeting software.
Banks often provide other tools that aren’t strictly related to budgeting but can help you reach your financial goals.
Features like automatic bill pay can help you avoid fees for late payments. Automatic transfers to your savings account can help you build an emergency fund without having to consciously think about moving the cash every payday.
Bottom line about budgeting tools
Most people don’t look forward to maintaining their budgets. Once the initial work of creating a budget is done, you have to decide how hands-on you want to be. Then commit to checking in periodically.
Budgeting tools are designed to fit just about any personality and personal finance method. Experiment until you find a technique or combination that works for you. Stay open-minded about adapting your budget to meet you in your current season of life.
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