So you’re finally giving this budget thing a real shot. Good for you! But, wait! Before using that spreadsheet or logging onto that helpful website, consider this: There is a lot more to successful budgeting than addition and subtraction. Spreadsheets and personal finance websites are not the right tool. At least not at first. Now, I’m sure you’re wondering why in the world I would suggest doing anything other than utilize the speed and convenience of technology for successful budgeting.
Personal finance is much more behavior than math.
Using technology to run your budget will only get you so far because what you do is more important than what formulas your spreadsheet can do. Sitting down with a pencil and paper will leave a much deeper impression on the behavioral part of your personal finances. For example, forgetting to allocate enough money to groceries will force you to physically erase money from other parts of your budget to compensate. What you’ve created after your first budgeting system is your very own uniquely crafted budget. This ownership and experience is incredibly important to your success!
Once you have a few successful months of budgeting under your belt you can certainly transition to a digital spreadsheet version of your budget. This allows most of the calculations to be automated as well as the ability to easily add and delete rows as needed. The tracking of expenses during the month is still 100% manual. For example, when you buy clothes the first thing you should do is list that purchase wherever you’re tracking your expenses for the month. Websites such as Mint.com can automatically discover and categorize your purchases to relieve you of this burden. However, I don’t recommend using this particular tool because it takes away your ownership of your budget.
If you want to really succeed in starting a budget, ensure that you own it! I suggest waiting a few months before using your computer as a budgeting tool. It won’t be easy or natural initially, but you will soon reap the rewards and become master of your cash flow.
What about you?
- Have you taken ownership of your budget?
- How do you track your monthly expenses?
- How do you ensure your budget is a success?
