Want to get your money situation back on track? Feel like you should have more than enough at the end of the month, but somehow each month still feels paycheck to paycheck?
There’s ONE thing that EVERYONE in that situation should do.
It starts with a ‘B’
It ends with an ‘ET’
The middle is ‘UDG’
I know, I know, when I mention the word budget, you may be conjuring up images of pulling teeth or eating sand. Okay, maybe not that bad, but most people I talk with don’t have a very positive image of budgets.
Not only do budgets help you get your finances on track, but once you are there and on track, they allow you to live your life fully. Many people have ideas of a strict, no fun lifestyle when living on a budget. It’s the opposite! Well, almost. My family and I include fun spending in our budget… we just have it squarely into a category and in a certain amount. It’s freeing knowing we can spend on fun, guilt free, and allows us to enjoy the fun we’re actually having.
Changing the image of budgets
Budget expert and personal finance blogger, J Money has a website called, Budgets are Sexy. Great name, right!? He’s a budget expert and has crazy amounts of resources on his site for you to try out. He’s on a mission to people understand the truth behind budgets. They work! Check out his site and all the resources he has around them. And, I think he is on to something with the name of his site!
Forget Justin Timberlake’s song, “I’m bringing sexy back…” As J Money says, “I’m bringing budgets back!”
He even has T-shirts for sale, with that slogan on them! I love it.
Here’s what I want you to remember about budgets
A budget is the FIRST, and in my mind, the MOST important thing to implement if you’re trying to get your money right, even if you have plenty of it! It’s the first thing you should look at, if anything… and I mean if anything in your finances seems off.
Imagine you went to the Doctor because something didn’t feel right with your health, and they took one look at you, didn’t say a thing, squinted, looked down at their Rx pad, and wrote you a prescription for some medication. You’d be puzzled, right?
Because they didn’t diagnose anything.
How can they write a prescription if they don’t have a diagnosis? They can’t!… or at least they shouldn’t…
How can someone fix their money if they don’t have a diagnosis? How can they fix their finances if they don’t know what to fix or tweak? Well guess what?
A budget is the best diagnostic tool I have ever encountered in personal finance.
Whether you’re trying to:
- Pay off debt
- Save for a down-payment on a home
- Start an emergency fund
- Find an extra $1,000
- Save for college
- Save for retirement
- Take a vacation
- Or just tighten the belt
Whatever it is, a budget is the first place to start.
A budget helps you stay accountable to your priorities
The right types of budgets help you understand your priorities. They say if you want to know who someone really is (or what is important to them), look at where they spend their money. Yikes!
If I looked at your spending, what would that reveal about who YOU are? Are you okay with that?
Understanding your goals & priorities, and then lining up your money to stay true to what you’ve identified as important, is important in and of itself! Establishing a budget can help you stay accountable to what is important to you! Humans are weird, weird animals and we often need to force ourselves to do things that we know are healthy for us.
Whether you feel like your living paycheck to paycheck, or you’ve got plenty of positive cash-flow, maintaining a budget is vital… if you care about doing the best you can with what you have. Many people just wander through life without a plan. Spending money on things that don’t bring you joy, or make you money.
Something has to give.
So you may be asking the question…
What type of budget should I use?
The one that you can stick with, and the one that works for you!
It just doesn’t matter which type you actually use, as long as you actually USE it and can stick with it! Try an app, an excel spreadsheet, a pen and paper, a chart, a jar, an envelope, or any other method you may have heard of.
Budgeting Tools That Work, to Help You Get Your Finances on Track
Here are a few actual budgeting tools that you can use/download and use yourself.
Mint – My family and I have used Mint.com for a long time and we like this tool. When you sign up for Mint.com you can sync your bank accounts with it, then Mint tracks all of your income and expenses for you. This makes tracking where you actually spend your money, pretty easy, and enlightening. Mint is probably the most robust and well-known budgeting software tool out there, as they are backed by Intuit. What I like most about Mint is that it does so much of the work for you! Things just happen automatically within the app. You do have to watch it and learn from it. You create your budget, as in, where the money goes, then Mint tracks where the money actually goes, for you. Mint will even provide suggestions for optimizing your budget. If you want to change your behavior, you need to understand your current behavior first, that’s why Mint is so powerful, because it shows you exactly where you money goes, based on the budgets you create. In all, Mint is an awesome solution for those looking for a robust, easy to use, intuitive, easy to install budgeting tool that will definitely help you change your finances for good.
Personal Capital – Is much more than a budgeting tool. This can not only help you budget, but it can also track your entire money picture. So if you have other assets, like a 401(k) plan, or a Roth IRA, or a checking or savings account, you can link those accounts with Personal Capital, and you have a beautiful display of your assets in one place. You can also sync your bank accounts to this, and it tracks your spending as well. This, in my opinion, is the best all around tracking tool. Not a purebred budget solution, but it definitely can put you in the right direction, especially if there are multiple accounts involved. This system has very, very nice, easy to read charts and graphs, which make it a joy to interact with. If you want a more comprehensive money picture for yourself, Personal Capital is a great tool to help you understand your current financial situation, set financial goals, and monitor your progress along the way. That’s why I love Personal Capital. It nudges me of me toward my goals, while reminding me of where I am now. In all, Personal Capital is an awesome budgeting/tracking solution. I personally use it and love it.
Everydollar.com – Everydollar is an app by Ramsey Solutions, as in, Dave Ramsey. He is the king of budgets, paying off debt, living within your means, so that you can enjoy your life. His slogan is:
“Live like no one else today, so that tomorrow you can live and give like no one else.”
I love that.
In a nutshell, what I love about Everydollar, is that it’s proactive. You’re assigning dollars to a specific home each month. It’s a “zero sum” budget, meaning you budget out ‘every dollar’ and give it a home. Jenna and I personally use Everydollar, everyday. There is a Pro version for $99. We currently use the free version and are more than happy with it. Our “budget” meetings are centered around our Everydollar apps, as we assign dollars coming in for the month, to a specific spending goal or objective. A very nice feature of this is that your previous month’s budget is automatically pushed to the next month, so you don’t have to re-create the wheel each month. This is one of the purebred budgeting solutions, so there aren’t a whole lot of extra bells and whistles, at least with the free version. Once you get the paid version, bank account linking takes place and a more comprehensive picture is taken. For now, the Everydollar free version does the trick and we’re really liking it.
YNAB (You Need A Budget) – YNAB is an awesome, purebred budgeting tool. A TON of people love it and swear by it. This tool also uses the “give every dollar a home” methodology. You assign where the money goes, and it tracks accordingly. YNAB links up to your accounts, so it tracks real-time. It can alert you about over spending towards a category that you establish. So let’s say you allocate $100 to the “restaurants” category at the beginning of the month, the system can alert you if you’ve spend $105 at restaurants. That’s cool! You can also set up different savings or debt-paying goals, and the tool provides you with super nice progress charts. YNAB does cost $50/year, which is a little pricier than I’d like to pay, that’s the ONLY reason why I haven’t personally used this. They do have a 34 day free trial option. I have vetted it from other people who have used it, I’ve read countless reviews of it, and can confidently recommend it to you only because I know I’ve done my homework.
Excel Spreadsheets – J Money at BudgetsAresexy.com has a great round-up of budget spreadsheets that you can try. Also, check out Chris Peach at MoneyPeach.com He has a great site, with awesome budgeting and debt-payoff tools.
Jenna and I have also used Excel spreadsheets and the key is just finding one that you like, that makes sense, and that you can stick with. There are some amazing ones out there, just make sure that it works for you.
A Piece of Paper – Seriously, this can work beautifully. Grab a piece of paper, write down all your expenses on the left side, your total take-home income on the right side, and start tracking.
Lastly, I’d be remised if I didn’t at least bring up one way to cut expenses… because that’s the next step, isn’t it? You set up your budget, start using it, discuss it with your accountability partner, then figure out what needs to go. What expenses do you need to cut from the budget. Well now there’s a pretty cool way to help you figure that out.
Trim financial manager is a pretty amazing piece of technology. It took me about 2 minutes to set up and already had provided information that I used to tweak our budget. Essentially what Trim does, is it scans your purchasing patterns (manual purchases, or recurring purchases) then tells you what purchases are recurring, and nudges you to make decisions about keeping, or cutting that recurring expense. How cool is that? So let’s say you have Netflix, gym membership, Audible, cell-phone, and a newsletter subscription all on monthly payments. Trim reminds you of the charge and what it is for. So many people (myself included) have some monthly charges that definitely aren’t still bringing the value that we’d hoped for, or we just don’t use it any more and maybe you’ve forgotten all about it, but are still paying for it monthly. Now you can ‘Trim” it from your budget. Pretty cool. Check it out.
Find an Accountability Partner
The advice that I give around which budgeting tool to use, is to just pick one that interests you and that you initially think, “I could see myself using that.”
Great. Download it. Upload it. Tell someone.
The next thing that I encourage people to do, is to have someone go through it with you. Have an accountability partner. Someone to hold you to your decisions and results.
A friend. Spouse. Parent. Relative. Neighbor.
Whomever it is, just get someone to check in with you every once in a while to gauge your progress.
Jenna and I have monthly budget “meetings.” Okay, so it usually involves a glass of wine and other discussion, but it’s always around our budget. We talk about what specific thing or things our money is going to this month. Sometimes it’s the same, and sometimes it’s totally different. Whether we are putting extra money towards our retirement accounts, paying extra to a car loan (I know, I know… don’t judge), putting extra into our son’s 529 plan, or something else, we always have a plan, and have it in our Everydollar app & Mint app. It works for us and we love it.
So now that you have permission (which you DIDN’T NEED!) to make your budgeting process fun, you know that it can be automated through apps and tools, and that it is the #1 thing to do to get your money right… you have one more thing to do. Do it.
Trust me; if you don’t start one today, you’ll wish you had. If you don’t start one this week, you’ll wish you had. If you don’t start one this year, you’ll definitely wish you had. It’s never too late to start one, and here’s the kicker:
I’ve never met someone who regrets budgeting. BUT, I’ve met plenty of people who regret never budgeting.
Whether you have plenty of income coming in, but feel like you can be more intentional, or you feel like you’re living paycheck to paycheck; start with a budget! It’s your diagnostic financial savior and will create the positive habits that pay dividends beyond your budget. It will create the gritty habits that I’ve seen first-hand from millionaires alike.
Or something else to get your money right.
Budgets are the first step to getting your money right, and congrats, you’re about to make an excellent decision!
Creating a budget is the best way to change your finances and turn your financial life around and to start living the life you dreamed of.
Yes… it all starts with a budget!
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