A personal budget or home budget is a financial plan for your home and family that allocates future personal income towards expenses, savings (there’s that word again) and paying off debt. Past spending and personal debt are considered when creating a personal budget. There are several methods and tools available for creating, using and adjusting a personal budget. For example, jobs are an income source, while bills and rent payments are expenses. Below is an example of a personal/home budget on a Microsoft Excel spreadsheet.
Many tools are available today and very helpful for constructing a personal budget. Regardless of the tool used, a budget’s usefulness relies on the accuracy and currency of the data. Computer generated budgets have become commonly used as they replace the need to rewrite and recalculate the budget every time there is a change. Technology is a wonderful thing!
- Pencil and paper
A simple budget can be written on a piece of a paper with a pencil and, optionally, a calculator. Imagine that! Lol
- Spreadsheet software
Spreadsheet software allows budgeting by performing calculations using formulas, for example in keeping track of income and expenditure. A drawback of budget spreadsheets is that some do not offer date-shifting, so information has to be reentered or moved at the end of each month.
- Money-management software
Some software is written specifically for money management. Products such as Quicken, Micrsoft Money, (not sure if this is still available), and MoneyLine, are just a few and are designed to keep track of individual account information, such as checking, savings or money-market accounts. These programs can categorize past expenses and display monthly reports that are useful for budgeting future months. I personally use Quicken and I love it.
- Money-management websites
Are you currently using one of these methods of budgeting? It really does help! It literally tracks where EVERY DIME is going. This in turn let’s you see where you’re WASTING MONEY so you can change that and SAVE MORE!!
Thanks for reading,