Best way to Manage your Budget

Best way to Manage your Budget

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how to manage your budget. Learn how to manage your budget in 3 easy steps. Some people prefer excel sheets or cash envelops, but I have found the best way for budget management
Photo Credit: FreeImages.com/Paige Forester

Looking for a great way to mange your budget?  Some people prefer excel sheets or cash envelops, but I have found the best way for budget management is via an online app or too.

I’ve got 2 easy steps for you to manage your budget.

I manage my budget 2 ways each month… stick with me here, it’s not bad, I PROMISE!

Neither of them involve cash envelopes… That is too bothersome to pull out cash and divide it up (at least for my family).

The methods I use at first may seem time consuming…  Pretty soon it is just a habit like checking your email.

How to Manage your budget

Find a free website or app to track your money, I find searching Pinterest for “best budgeting apps” is the best way to see the top opinions.  Or click here for a website that lists 15 top free budgeting apps to find what works for you.  Read more about my favorite money management app.

1. Find an app or tool:

There are 4 things to look for when looking for a budget management tool:

  1. Able to create separate accounts
  2. Able to create different categories so you can set that up with your budget expenses
  3. Easy way for you to enter in your money, that you UNDERSTAND how to work it.
  4. Easy access to your Budgeting management account so you USE it every/every other day to keep you accountable to your budget.

Make sure your app includes a way to track many different bank accounts, allows you to add tags to each expense you put in our take out, and allows you to set goals.

I don’t use a very common one, but I LOVE it!  Personally, I choose to use Moneytrackin.com. It’s a free way to track your expenses.  Read more here about moneytracking and why I like it!

 2. Enter in ALL your expenses

and make sure they fall under a specific category in your budget.  When you add an expense, or label your expenses into categories on your app, make sure ONLY use the category’s that go in line with my BUDGET.  This will make step 2 a lot easier!  I only have a few budget categories (besides my bills and savings), because it makes managing your budget much easier.  More on this under Step 3.

There are various ways to add your expenses.  You can save receipts, then add it.  Use an app that connects to your bank account.  Or, look at your bank and credit card statements and add it in then.

Not sure where to start with a budget?  Read more here on where to start with your finances.

Every day

Every day, or AT LEAST every other day, you NEED to be making sure your expenses are entered in and you are categorizing them.  This allows for quick access to see how you are doing on your monthly budget..

Just the fact that you are looking at your bank accounts each day will help you stick to your budget, and you are more aware of where your money is going.

3. End of the Month check

At the end of the month, you need to check to see how you are doing.  Pull out your budget worksheet and write down how much you spent in each category for the month.

THIS may sound long… but it really only takes about 5 min if you have already given each of your expenses a category.  Click on the “category” or “Tag” in your app, and click on the budget item. Then, fill in your worksheet with your monthly spending.

Do this with EACH of the items in your budget.  See the picture below.  You can see how my first column is a list of Expensessecond column the Budgeted amounts.  Then, to the right there are 6-12 more columns each for a month.  At the end of the month, I put the total amount of each expense on the list.

At the bottom of the chart is a “Total” which is what the total budgeted expense are (usually this doesn’t change unless you are working  from your previous months income).  Under that is “Actual“, so each month you will want to total up your actual expenses and you can see the difference.

By writing down the totals each month on one page, it is easy to take a quick look at how you have improved or changed over the previous months.  You start to get a good idea of where all your money is going.

budget worksheet

Making sure you look at your monthly expenses is important in how you manage your budget.  It will allow you to see your success, and see the areas you need to work on.

 

Conclusion

So, make sure you find a good app.  Try out a few of them each for a few weeks or a month.  Make sure you find one that you like and can live with.  It is important that it works for you, because then you’ll manage your budget much better!

Categorize or tag each of your expenses to match your budget categories.

Finally, make sure you see how you did at the end of the month.  Then, if needed, make adjustments for next month!  If you find you are over budget read HERE for some tips and solutions.

Just recently I started living off our previous months income only. I used to work on weekends, but now not so much. This means things we budgeted for don’t fit because I wasn’t earning as much as I used to. Since some months I make more than others I wanted a way to have a flexible budget without having to spend tons of time re-figuring each month.

What are some tips you use to manage your budget?

 

This post may contain affiliate links.  Read my affiliate link disclosure here

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