The first step in making a budget is to see where you are spending your money. When you track expenses regularly, you might be surprised at where you spend your money. I spend my money differently than you. A set budget doesn’t work for everyone. You need to have the flexibility if you want to make it work.
I have an excel spreadsheet to track expenses and balance my checkbook regularly. But, I decided to try the free apps on my iPad and see which one I liked best. Here’s a review of the pros and cons to each app that I tried.
Checkbook. This is my favorite and the one I’m currently using. Pros: it is easy to set up categories, fun pictures for categories which makes it easy to see at a glance, easy to add transactions, recurring payments. Cons: if you put in the wrong date, it can be very difficult to find the transaction. Also, I don’t like that you need to go into the detail of the transaction to enter it but you can’t mark it as cleared until you’re on the main screen. This one has a lot of manual entry.
Mint: Pros: Most of the work is done for you once you set up your accounts. It will track your expenses. I like the reports. I like the e-mails when I reach a goal. And, I like the credit report tracking. Cons: I like to look through each category and make sure that my expenses are in the right categories. For instance, I buy my gas at Costco but I like to keep the amount separate from what I spend inside the store. So, I need to go into Mint and move transactions around. You also can’t put in the transactions before they clear your bank. You can put in a budget for each area and then once it clears the bank, it will take the money out of that bucket for the month. For some people, that might be a pro. I haven’t used it enough in that way.
Every time I get paid, I spend the money by entering transactions into Checkbook that day. I use my accounts more like the envelope system. But, I don’t like to carry cash or pay with cash all the time. So, by entering the transactions when I get paid, and spending all my money, I know where all of my money is going for the week because I get paid every week. I give myself $40 a week to eat out. This includes fast food, lunches, and date night. When the money is gone, I don’t spend anymore money on eating out that week. If I have some left over from the previous week, it gets added into this week’s amount.
Tracking expenses is an important part of setting up and maintaining a budget that works for you. You probably looked at my $40 a week to eat out and thought that’s way too much or that’s way too little. You get to decide what that number is for you and then stick to it.
If you can’t stick to the budget in an area, you need to look at which budget you can make smaller so that you have more room in this budget. If you can’t stick to the budget, what good is it doing you? Reevaluate your budgets on a regular basis.