Personal Budgeting Styles & Tools
September 26, 2009
Personal budgeting can be a different process for each person. When I talked about how personal budget tracking can save you money, I used an example of how my employer saves money by tracking each piece of paper we print.
I showed how the act of tracking each job before it’s printed and assigning it to part of the budget causes us to more careful with what we print. I ended my discussion with two questions.
- Are you tracking your spending against your budget?
- What system do you have in place to monitor your expenses?
Personal Budgeting Styles
The example I gave was of a very detailed tracking system and Plonkee brought up the point that such precise tracking wouldn’t work well for her:
“I don’t know – there’s a limit to how much tracking is worthwhile. I’m not very detail oriented and would struggle to keep up with anything that was in depth. I prefer to give myself allowances. I can spend whatever I like, on whatever I like, but the total budget for *frills and frippery* is limited each month.”
I definitely understand where she’s coming from, in a financial confession earlier this year I admitted that I hate budgeting. Of course ctreit sounds like he feels the opposite when he shared how he budgets and tracks his spending:
“When we track our expenses, we are very diligent. We include every single dollar we spend. After all, even the afternoon candy bar for 75 cents adds up to 20 bucks or so in a month. There is one big benefit when we track our expenses: we become very careful about spending money because we don’t want to face the music at the end of the month if we spend money stupidly. I for one would not want my wife to reprimand me for foolish spending.”
Our Credit Card Tracking System
I think each person has their own personal budgeting style that works best for them. For example, when I asked, “are you tracking your spending against your budget?” the answer could be that you sit down with your credit card statement at the end of every month and see where you spent your money and how it compares to what you had budgeted.
We charge everything on our credit card, our system for monitoring our expenses is to leverage the technology of American Express and Visa to track and categorize each expenditure. Then we can can download the transactions into Quicken to categorize anything that was missed and compare it against our budget.
I don’t what makes different budgeting styles fit better with one person or another. I suppose it’s partly your personality and partly how you were raised to manage and think about money. So regardless of what system for tracking and monitoring your expenses you use, the important thing is that you have and use a system at all. If you have one, great. If not, here are some tools for tracking and monitoring you can play around with to see what fits you best. Credit cards for spending and tracking and personal finance software for monitoring and analysis.
Credit Cards
Personal Finance Software
All posts by Ben Edwards
Different people might prefer different approaches to tracking their spending – some like to do it on an excel spreadsheet, some simple software ad some more sophisticates ones – They key is to get started and track everything you are spending. And then compare it with previous months and make adjustments to your spending habits accordingly.