The thing I like about having a budget is that I can tweak it to fit different circumstances at different times. I set up a zero based budget where every dollar is accounted for and has a job to perform.
As I have built up my Emergency Fund and made the best use of ING for various savings goals I have become more comfortable with the flow of cash through my various accounts. This is not to say that I have the (Suze Orman recommended) 8 months of expenses saved up but I do know where my money is going to and coming from at different points in time.
I have mentioned before that I use Money, Quicken online, Mint and Google Docs to track my finances so that I know what my balances are. I used to track many items in great detail when I first started budgeting and then as I got the hang of it I was able to simplify my finances a little bit. I condensed some of the categories because I did not need to track things in as much detail.
A few months later I realized that I could simplify even more and cut out a few more categories in my budget by putting all purchases on credit cards and simply paying the credit cards through ING.
Now that I have my cashflow set to where my finances are automated I do not even want to bother with the updates from Mint and Quicken so I have consolidated all transactions into the following categories for online tracking:
* Household (includes all other expenses, cash, credit card payments AND savings)
I still have my budget with various categories like
Credit Cards etc. in Google Docs so that I can see what areas I am spending money and in what areas I can afford to cut back. The budget is set up as a template so that I only need to copy the spreadsheet and name it for the current month every time I need a new budget for the month. Any money left over at the end of the month (e.g. when I spend less on gas than I budgeted for or when I make a killing using coupons) is transferred to a holding account for Overrages and Coupon Savings so that my finances start over fresh every month.
This way I only have to make sure three categories are properly tracked online and the rest of it is accounted for in my Google Docs and Money when I do my weekly maintenance.
My financial managment is now much simpler and therefore easier to deal with, reducing my stress and allowing me to manage my money more effectively.
Some good tips on budgeting – but I guess the key issue is self-discipline. Not everybody has this ability!
I agree with you there Howard, I think the most difficult part to spend within your budget is self-discipline. We all struggle when it comes to this, I guess that’s what shows how human we are!!
It will be a while before we have those 8 months that Suze recommends but each penny saved leads you closer to that goal so I am not discouraged. Living within our means and on a budget has been our insurance for sanity during these troubled times. I fear for others who choose not to do this…