When money is tight (and even when it isn’t), the most important step is tracking where your money is going. You must be diligent that all bills are being paid and you aren’t spending money on wants that has to be used for needs. Money tracking looks different for everyone. Here are three techniques that can be utilized to help you manage your budget.
1. Basic Cash Flow Chart
This is my go-to view for my budget. I can pull it up on my computer and see everything that I need to pay, when I need to pay it, and everything that is coming in. I can make adjustments easily if an amount changes or I need a new line. The goal is to make the two totals even. Let me explain.
We live on a very tight budget, so you will see only the basics (with the exception of the YMCA) on our expenses. If we had more wiggle room, you would see a line for savings and possibly one for weekly fun money or date night. You can add lines for anything – Daily Coffee, Weekly Lunch Ordering Out, or Kid’s Allowance. If you plan where every penny goes before you earn it, you know that it has a place. When you decide you want to do something that isn’t in the budget, it makes you look and see where you can take that money from.
For example, suppose I decided I want an Iced Coffee when I am out with a friend. If I get it, I subtract that amount from my grocery budget for the week. That way, my expenses still match my income. Now let’s look at another way you can organize your budget.
2. Calender/Monthly Planner
A calendar can be a great visual to know when money is going out and when it is coming in. This can help you plan grocery shopping and know what weeks may be a little tighter because they have more expenses. If you Google “Calendar Budget Template” you will get a number of free templates that can help you organize. This one is from EPrint Calendar.
Prefer something tangible? Get a monthly planner and you have a budget map that can go anywhere with you and is readily available even if your computer is turned off. Organizing this way can encourage sitting down and planning once a month so you are prepared for the next month. [BONUS: If you share your finances with someone else, this helps keep you on the same financial page.]
3. Cash System
When my husband and I first started budgeting, we took Dave Ramsey’s “Financial Peace University.” One of the biggest things we walked away with was using cash for all in-person purchases. It really helps makes the budget tangible. You take the cash out of your account and organize it based on where it fits in the budget; Gas, Food, Fun Money, Clothes, etc. When you purchase something that is not in the budget, it is used from another area. This provides an immediate cause & effect.
Going back to the iced coffee example from above, I would spend the money directly from my food budget and it would be immediately gone. That way I don’t forget when buying food and spend more than I have left in the budget. Mr Ramsey sells a fancy envelope system. We went with a 6-pocket expandable coupon folder from Dollar Tree.
<– Only $1!!!! Talk about staying in budget. 🙂
No matter how you organize, it is important that you do some organization. Budgeting on the fly results in miscalculations and stress. Money doesn’t have to stress you out. You can be in control. There is no shame in saying “I’m sorry, that just isn’t in the budget this month.”
Do you have any budget organizing techniques? Please share them in the comments!