January 19, 2009

Back to Basics: Building a Working Budget

{Every Monday during the month of January, I'll go Back to Basics and discuss ways to build a realistic household budget. I'd love to hear what works for you! Add your ideas or links in the comment section at the end.}

Back to Basics: Building a Working Budget

This is the third part of this four part series. In part one, I chatted about how important it is to track your day-to-day spending. In part two, I discussed the importance of gathering and itemizing your monthly expenses.

Now it's time to take the data you gathered in parts one and two and format a working budget for your household.

You can keep it simple: grab a spiral bound notebook, make a page for each month, use a ruler to create columns and rows, and then enter your expense categories. As you pay bills or do your shopping, you can pencil in the amounts you've spent.

You can also utilize some of these spreadsheets found online:

Personal Budget Worksheet for Microsoft Money; it's basic + functional.

A list of 10 different free downloadable household budget sheets from Christian Personal Finance. These include a debt elimination budget sheet and a wedding planning budget sheet. Good stuff!

Pear Budget, an online budgeting tool. The first 30 days are free; after that, you pay $3.00/month. It's fully customizable and looks very comprehensive but also very simple.

You can also check out the budget downloads available at Dave Ramsey.com.

Mint is the online budgeting site I would recommend if you're ready to move beyond basic budgeting and use one tool to align all of your financial accounts along with track your spending. It's totally free and the features offered are phenomenal. If you're looking for one online tool to manage every dime that comes in and out, this is the one. I plan on signing up for this myself and I'll keep you updated about how it's working for me.

And, while I did promise to make my own Google Doc budgeting spreadsheet available for download today, I've still got many formulas to finish within the document. And, quite frankly, I think you'll do just as well (if not better) by using one of the ideas I've mentioned in the above list.

Whichever method you choose, make sure it's one that you feel comfortable using day in and day out otherwise you won't use it.

Decide to spend some time this week on working on building your budget; don't necessarily try to do it all at once, especially if you're working on a spreadsheet and trying to plan out the full calendar year. Do it a little bit at a time. When you're done, sit down with your spouse and discuss it together. Communication is essential when it comes to financial success in your marriage.

What online tools or downloads do you recommend for budgeting? What hasn't worked for you? Share your knowledge and help someone else. Thanks so much for commenting; I truly appreciate each one of your comments!

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