An Analysis of Budgeting Tools

So it’s the New Year and you have started a budget because you want to be a better steward with your money. How is it going? Are you ale to stick to your budget? Are you able to stay within the spending limits you have set for yourself? A budget gives you more control over your finances, but you still have to control the 800 pound gorilla in the room – you. One way to keep on track with your budget is to use a budgeting tool.

What is a budgeting tool?

Okay, so what is a budgeting tool? A budgeting tool is a tool that you would use to help you stick to your budget. It helps you keep track of the money that you have already spent, and some even keep track of when you spent the money. You could have the greatest budget in the world, but if you cannot, or will not stick to the budget, it will not work.

How they are used

Budgeting tools are used to help you stay on track with your budget. You have done all this hard work tracking you’re spending and working up a realistic budget and now you need some to track your daily progress with the budget. You need a budgeting tool.

Budgeting tools should be used when you are working your money. Friday evenings, Saturday mornings, or Sunday after church is when you should sit down and take time to work your money. Do this every week and get into the habit of doing this at the same time. When you are working your money you are making sure that things are paid on time; looking to see if you are still on budget, staying within limits; and checking to see if there needs to be a change in the original budget.

Types of budgeting tools

There are many types of budgeting tools. Some you can download to your computer or they are online budgeting tools that can really help you with your finances. I want to tell you about some simple but very effective tools that you do not necessarily have to go online for.

One such tool is the payment schedule. The payment schedule is a list of all your income, expense, the date when bills/expense are due, and the date when you actually pay them. It is a toll to help you keep track of how you are doing with your budget.

Another is the monthly payment calendar. The monthly payment calendar is much like the monthly payment schedule except instead of listing income and expenses on a sheet, you write them down on a calendar. When income comes into the household you write it on the calendar under that day how much it was. When you pay bills/expenses, you write them down on the calendar the day you pay them. The monthly payment calendar helps you track your expenses. I like to use green for income and red for expenses.

Another is the envelope system. Using the envelope system, when you get paid you divide up your paycheck into envelopes and label the envelope with your different expense categories. This system helps you stick to your budget because when the food envelope is empty, you cannot buy anymore food and when the gas envelope is empty, you are walking. Now that is a diet plan.

I have talked to people that were able to save lots of money using the envelope system because it forces you to stick to your budget.

Remember the first step in budgeting is tracking your spending. You could have the greatest budget in the world and if you are not effectively managing it with a budget, it will not work. You cannot effectively manage your money if you do not know where it is being spent. Budgeting tools not only can help you know where your money is being spent but it can also help you stick to your budget.

Article by Wil G.

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