Four Easy Ways to Budget

Which of These Budgeting Methods Do You Prefer?


Budgeting can be a tedious task for many people. It seems dull, complicated and no matter what they do, they just can't seem to develop a good budget and stick to it.

But half the battle lies in the system you use. Use one that doesn't feel intuitive to you, and you're bound to find budgeting difficult and annoying. Find one that feels user-friendly, and suddenly budgeting becomes a snap.

Here are 4 popular budgeting methods to check out as you explore what works for you.

1. Budgeting Software -- Automated

Automated software or online programs like Mint, BudgetSimple and BudgetTracker can be linked directly to your bank accounts and credit cards, so you don't need to worry about keeping track of receipts and payments. Everything is automatically entered for you, so all you have to do is check in to see how you're doing.

This is the most hands-off method, which works great for people who tend to be disorganized and those who traditionally hate budgeting.

2. Budgeting Software -- Manual

If you're not comfortable sharing your account information, or you think recording your expenses yourself will keep you more accountable, you may want to consider budgeting software that allows you the option to enter this information manually.

Many budgeting tools, including the ones listed in the section above, allow you to either link to your accounts or enter data manually. Others, like BudgetPulse, are manual-entry-only.

Alternately, you can create an old-fashioned spreadsheet in Microsoft Excel that allows you to manually input your expenses, categorize each one, and tally up the results.

3. The Envelope Method

If you're a visual person, the envelope method can be a great way to keep an eye on how much you're spending in each budget category and how much you have left for the month.

Here's how it works:

When you get paid, first pay yourself by setting aside your savings instantly. Then pay all of your fixed bills (such as the mortgage or rent, car payments, insurance premiums, etc.). Then put the rest in cash in physical envelopes marked for each remaining budget category (eating out, groceries, utilities, etc.).

Once you've run out of cash in your envelope, you're done spending until your next pay period. If you see that you're running low, you know it's time to slow down your spending. It's an easy, tangible way to track your progress, and it prevents you from overspending.