A Simple Way To Budget? (Your Advice)

your advice

Many times it helps to hear how other people do the things and to use their examples to best fit your needs. That is such a question that came by e-mail the other day regarding how to budget:

I know that one of my problems is my lack of organization when it comes to everything and this is hurting my budget. I’m wondering how people keep track of their money and all of their budget information so that is easily accessible?

I find that my receipts and up all over the place most of the time, and if I am able to get them all into a single box for a month I feel that I have been organized. This doesn’t help my budget very much since it’s more of a headache to go through all the receipts than to just forget about them. I know that I need a good system to help me so that I can start to form a budget, but I have no idea where to start.

I have tried using computer software (Quicken and Microsoft Money) in the past but it seems to be even more complicated than just doing it by hand. I realize that it crunches the numbers better than I can by hand, but the extra step of having to input all the information means that it’s doomed from the start for me.

Is there a very simple way of keeping track of everything? I don’t want anything fancy at all, but a way to keep everything organized so that I can get a true picture of my budget and what I am spending. At this point I’m willing to try almost anything since everything has failed up to this point.

Finding a way to budget that fits your needs is an essential part to getting your finances in order. If you have a simple way that you keep track of your expenses that you think can help this reader, please leave a comment with an explanation of how you go about doing it. If you have special tricks that have helped you in the past, I think all the readers would appreciate hearing them as this is a difficult point for many people who are just beginning to get their finances in order.

(Photo courtesy of Colin Kinner)

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10 Responses to A Simple Way To Budget? (Your Advice)

  1. Monica says:

    I record my expenditures as they occur, rather than tallying them up at the end of the month. I have a looseleaf notebook, and for every month I start a new section with one page for each category. If I buy groceries I will record it on the “Groceries June 2007” page. Then at the end of the month I add up each page, and record the totals for each category on a summary page.

  2. Spokane Al says:

    I use MS Money and, like Monica, enter the expenditures as they occur.

    Frankly, if you are not willing or able to spend a few minutes each day to enter this information, then you will never get your budget under control. There is no magic bullet, you must keep track of your spending to know where the money goes. I think it works best to enter as you go, rather than allowing all the paper to pile up and then hope that you get around to it.

    Also, if you consolidate your purchases and then pay with checks or debit cards, you can easily break out the expenses via category with MS Money.

    The solution is to develop a process that you can live with, and then follow through while not letting the paperwork pile up.

    It is a matter of discipline which is how we succeed in this world.

    Good luck.

  3. Nathan says:

    We use an excel spreadsheet that keeps track of all income and expenses similar to a corporate balance sheet. Day to day reciepts are entered on a weekly basis in columns for the corresponding week of the month. Monthly expenses are tracked in a separate column on the side. This allows us to see recurring expenses subtracted from income, allot savings and budget weekly discretionary spending. It sounds a lot more complicated than it actually is. We’ve been using it for 7 years now and it works very well. Much simpler than the budgeting tools in Quicken.

    I think everybody needs to come up with a solution that works for them, the key is just picking a system and sticking with it on a regular basis. If you start getting behind, that’s when it seems like too much effort to bother with.

  4. Jen says:

    Similarly to the reader’s practice of putting monthly receipts into a box, I use a pocket folder. One thing I do to make the task of tallying receipts less daunting – before I put them in, I circle the total and write a quick note on them such as “ent.” for entertainment, or “gas”, etc. That makes it easier for me to put receipts together when totaling each type at the end of the month.

  5. crankywench says:

    Moneydance (www.moneydance.com) is much easier to use than MS Money or Quicken. I’m also trying out Mvelopes (mvelopes.com), which uses the envelope method to keep one aware of how much money is budgeted for each item.

    For keeping track of receipts, get a receipt spindle, and put it near wherever you tend to unload packages. Place the receipt on the spindle when you unpack, then check at the end of the week/month.

    Good luck!

  6. Andy says:

    Tracking your spending through a computer program or notebook is not budgeting. That can help you understand where your money is going, but budgeting is telling your money where to go. This means spending your money on paper before you get it in hand. This paycheck I get X dollars. This much goes to rent, this much for entertainment, this much for groceries, etc.

    This is a very simple way to know where your money is going. I don’t need to track my money through receipts or enter it into the computer. I know where my money is spent because I decided beforehand where it will go.

  7. A Tentative Personal Finance Blog says:

    First thing I would do would be to draw up a list of all your monthly expenses that are non-negotiable. Then list for things that you purchase throughout the month: groceries, dining, etc. Keep the money in envelopes. That way at the end of the month, if you don’t have anymore money for a certain thing… that’s it.

    I don’t personally use that method, but I heard it work for some people.

  8. Jim says:

    I would recommend using Quicken or MS Money and downloading transactions directly into the software from the bank, credit card company, etc. This saves juggling receipts but allows you to track your spending, etc.

  9. I use Jesse’s “You Need A Budget” software from youneedabudget.com – being careful to enter expenditures every three or four days.

  10. HeadWrench says:

    I second the motion for “You Need a Budget.com”
    Jesse also has very sound and practical budgeting advice.

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