Budgeting is one of those topics that is endlessly written about and mostly in a dry fleshless manor as to put the reader to sleep. First make a list of your expenses. Second separate the needs from wants. Track you expenses for 30 days to see where your money is being spent. Remember to pay yourself first! Establish a savings account with at least 3 to 6 months savings. Yada yada yada and snooze. Look, none of the above budgeting advice is bad and you can find lots and lots more if you just Google budgeting.
The bottom line which I’ve said time and time again on this blog or to anyone who listens is – people that are good with their money pay attention to their money and people who are bad with their money don’t. This is not an oversimplification but it can be expanded. People who are good with their money have a budget and people who are bad with their money don’t. A budget or spending plan is the main tool in personal finances that allows you to pay attention to your money. Without a budget, you aren’t really paying attention. So I would like to present to you, my thoughtful readers, the 5 best budgeting tools in the year 2019! (Trumpets sound!)
1. Budgeting Apps
Let’s face it. Smart phones have taken over the world and we are living in the age of apps! Yes, there are a plethora of apps available to help navigate your budget. Frankly, there are so many that when I started to look into it, there was just too much ground for me to cover. Others have already covered it in far greater detail than I’m able. In fact, I’m kind-of over apps at the moment. But hey, apps are cool so to help you decide, check out these two lists on budgeting tools: The Balance’s 8 Best Budgeting Apps of 2019 and NerdWallet’s Best Budget Apps for 2019. Hate to be a David Downer but one word of caution. Apps are not magic. Even if you pay a fee for the app, it will not magically solve your money issues. Apps are only a tool you can use to budget but you’re the one that must use the app. That brings me to the 2nd most important tool.
I know what you’re thinking. “Is consistency a tool?” I’m not sure but it’s my blog so I’m using it. I would have put it first but you know….apps! Consistency is the most important budgeting tool you have and it’s free! Look, remember New Year’s? This was the year you were excited to get back in shape. You couldn’t wait to eat better, feel better and feel stronger. And it worked, at least initially. But then you had to work late and the kids had activities and you just didn’t have time to get to the gym. You tell yourself if only I had time, I would definitely exercise. You say this to yourself as you finish the last slice of pizza and hit play on the next Game of Thrones episode. Okay, that was a little too specific to be random, so let us just move on!
Healthy habits like exercise and diet must me consistently maintained to take effect. Budgeting is no different. Without consistent review and amendments to your budget, it will not benefit you. Review your budget regularly by making time on your calendar. You should sit down to review your budget and pay bills at least once a week. Do it at the same time every week. Saturday morning while you drink your coffee or Friday night with a glass of wine. Doesn’t matter as long as you remain consistent. Same day, same time every week even when you don’t feel like it.
3. Bank Statements
I remember when we had check books with registers. When we wrote a check for a utility bill, groceries or took cash out of the bank, we wrote it down in the register. At the end of the month, the bank would send us our checking account statements. We would review our register with the statement from the bank to be sure the balances matched. Now, we can check all the transactions from our checking account instantly online or app. So what do we do? We check our balance to see how much money we have left until next pay and not much else.
Review each expense on your bank account each week when you consistently sit down to do your personal finances. Your checking account statement has information that will benefit you. Your bank has done the expense tracking for you. Do the expenses line up with your budget projections? If not, why? Changes must be made to your budget or to your spending. Spending is where your budget meets the real world so check it often.
4. Savings Account
I know…I know…Savings is a budget line item not a tool! Again, my blog my rules! Savings is what allows you to have a budget in the first place. Without a savings, you’re required to be perfect. Kind of a difficult standard to reach! Budgets are projections and must be flexible. Are you good at predicting the future? Let me tell you, I’m not great. We are planning ahead as much as possible with a budget but sometime unexpected things come up. In fact, I would say often unexpected expenses happen. A slush fund savings that can be accessed when needed is most important to keep a budget going and functioning. It allows you to deal with unexpected expenses without borrowing or skipping a payment on a bill.
5. Spread sheet, Paper and Pencil
Look if you like apps and will use them consistently then I’m all for it. I use a spread sheet mostly and sometimes a notepad and paper. All the budgeting tools you need are located right here. They are free and I’m not just saying this, they are what I use. I’ve used apps but I’m over apps for now. I’ve used software too but it was hard for me to stick with it. These tools are simple and free. Be good with your money. Pay attention to your money. Use these fee budgeting tools.
If you need extra help creating a budget? Try our FREE and confidential Financial Review Session! A certified Financial Specialist will help you create a budget unique to you.