For some, creating and using a home budget feels complicated or intimidating. Having the right tools to help with both budget planning and management can relieve the stress, but selecting the right tools for your personal needs is an important first step. You should choose a home budget tool that is sophisticated enough for your needs, while being friendly enough that you won't mind using it on a regular basis.
Envelopes are an old-fashioned budgeting tool, yet they're still one of the most effective because if you use them, it's almost impossible to overspend. To use envelopes as a budgeting tool, label each with the name of a bill or spending category. Each time you receive income, convert it to cash and divide it into envelopes that need funding. When you need to go shopping or pay a bill, remove the funds from the applicable budget envelope. When an envelope is empty, you stop spending money in that part of the budget, or you reduce the budget in another area by physically moving cash from one envelope to another.
Pen and Paper
Pen and paper are simple but flexible home budget tools. You can write down a basic list of fixed and flexible expenses for example, and track how much you spend in each area as you go. You can also create or print various budget worksheets that help you track expenses in conjunction with your checkbook register. Many paper-based budget planning systems can be found online for download. The University of Maryland, for example, has a group of budgeting worksheets designed to help you determine what you must spend for fixed bills such as rent, and what you'd like to spend on flexible costs such as groceries.
Many computer software applications exist to help you with personal budgeting. Some, such as Microsoft Money and Quicken, are designed to give you a complete set of sophisticated financial management tools that help with cash flow management, debt reduction, and retirement in addition to household budgeting. Other software applications such as You Need A Budget, focus more on budget planning specifically, while including bank account management and tracking as part of their feature set.
Several Internet applications are designed as home budgeting tools that can be accessed on the go. Mvelopes is modeled as an online version of the envelope budgeting system that lets you combine money tracking and bill payments from multiple accounts. Mint.com also helps you track multiple financial accounts and keep track of your budgeting goals through the Internet, and both services provide account access through mobile devices as well.
- The Total Money Makeover: A Proven Plan for Financial Fitness; Dave Ramsey; 2007
- University of Maryland: It's Your Money: Making Choices
- Mvelopes: Overview
Kathy Burns-Millyard has been a professional writer since 1997. Originally specializing in business, technology, environment and health topics, Burns now focuses on home, garden and hobby interest articles. Her garden work has appeared on GardenGuides.com and other publications. She enjoys practicing Permaculture in her home garden near Tucson, Ariz.