We’re one week into the month of February. Did you have a chance to make a budget back on the 1st? If so, you might be wondering, “What’s the best way to ensure I actually stick to those budgeted numbers?”.
I would recommend one of two ways.
Cash Is King
If you’re familiar at all with Dave Ramsey’s philosophies on getting out of debt and managing your personal finances, you’ll know that he is a huge proponent of the cash envelope system.
In this situation, you literally use only cash. Each envelope is labeled with a name, the budgeted amount of money is placed into the envelope, and when the envelope is empty…no more spending for the month.
It’s pretty simple. When there is no more money to spend, you’re mathematically guaranteed to not go over your budget!
Another option for those more willing to trust technology would be a website like Mint.com.
Here, you plug in all of your financial information and link your bank’s savings, checking and/or investment accounts. Mint then keeps track of transactions and balances to view in one dashboard.
I was a little hesitant at first, but after reading into it, decided to give them a shot. You can’t physically move money between accounts using Mint, so that made me feel more secure about it; you can only see account activity.
The big draw to Mint for me, though, is the budget tracking (example below).
You start by entering your income for the month and then all of your planned expenses. This example shows that I haven’t been paid yet this month, but I’ve over-spent on gas, covered my cell phone bill and am still in the clear with everything else.
The site will auto-classify your transactions, but you can also manually assign each card swipe to keep track of your money “buckets”. They also show your total projected balance for the month (bottom right corner), which in this case warns that I’m planning to out spend my income by $118. (Time to rework that grocery bill.)
You can then check the site or the app as often as you like to stay on top of your spending. Or have them automatically send you warnings and weekly summaries to let you know when you’re going over budget.
There are a lot of other free budget tracking sites listed in articles like this, so also check those out and see which might work best for you.
At the end of the day, it’s all about spending less than you’re bringing home. To track that spending, it’s important to find a method that you both trust and can easily implement – that way you stay on your path to financial success!
What method do you currently use to track your spending? How has it helped you stay on budget? Let me know in the comments below!