3 Fast and Easy Budgeting Methods
After reading some of Brandon A’s posts on budgeting, I have been on the lookout out for easy, non-time-intensive budgeting solutions that anyone, from college students to professionals, can use. Here are the three methods I have turned up so far (besides the innovative method pictured to your right):
Reverse Budgeting
This budgeting approach works much like a checksum does. A checksum looks at a file you downloaded off the Internet and makes sure it matches the original size it was suppose to be. This makes sure no viruses have been added to the file and it has not been corrupted.
In the same way, reverse budgeting consists of setting a general goal at the beginning of a period and then checking it at the end. This works great for people who don’t have time to set up categories and really plan spending. “nickel”, a financial blogger, describes it this way:
“Instead of setting up a detailed budget, complete with projections of how much we’re going to spend in particular categories, we have predetermined (and rather aggressive) savings goals. Beyond that, we mostly let the chips fall where they may. Of course, we also have a few other targets (like giving a prescribed percentage to charity). But, for the most part, as long as we’re hitting our savings targets, we don’t really worry about the details of where the rest of our money is going.”
Pros: Quick and easy for both setting the goal and assessing progress
Cons: Spending is only tracked at the aggregate level, if you don’t meet your goals, you don’t know why unless you trace your costs back manually
Automated Budgeting With Yodlee
This is the method that I use and frequently encourage my friends to use. Yodleeis a free service that allows you to tie all of your accounts into their system and then it tracks and categorizes all of your transactions automatically. At any time, I can login to the site (even on my mobile phone) and check how much I have in my accounts, what my net worth is and what bills are coming up.
In addition, Yodlee allows you to set budget goals for any of the categories it has and then it monitors them for you, emailing you when you get close to the limit and giving you a status report at the end of the month. I usually have to correct one of or two of the categorizations a month but the system is effortless and it tracks 401k accounts, investments and airline miles too. The setup takes anywhere from 10 minutes to 45 depending on the number of accounts you have but it is well worth the effort.
Pros: Comprehensive budget control, online interface, little maintenance, easy to use
Cons: 10-45 minute setup, some don’t trust their financial information online
The Old Fashion Way: A Spending Plan
You know what I am talking about, your parents used to do it on graph paper, your company does it on Excel spreadsheets every day and accountants like Brandon A love it. This method involves using spreadsheet software or specialized financial software like Quicken to layout your spending plan (the Vicenarian has a few tips) and track it by loading in your account records. It is slightly more secure because it is not stored online but is a much more manual process that many don’t take the time to do, even if you can download your transactions with the click of a button.
Pros:More secure, more customizable
Cons: Not automated, time intensive
What budgeting method do you use?
This post is part of the MBN’s group writing project on budgets.
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February 7th, 2008 at 6:48 pm
[...] * Newly Corporate: 3 Fast And Easy Budgeting Methods [...]
February 7th, 2008 at 7:52 pm
i don’t know what works for other people, but this is what works for me.
it’s about what works for you and sticking it with it. sticking with it is the tough part.
February 12th, 2008 at 7:16 am
I love the first picture in this post… haha
February 13th, 2008 at 10:12 am
[...] Know your budget You can read more about budgeting here or at thevicenarian. It’s not as hard as it sounds, and it’s a crucial step in living a [...]
February 13th, 2008 at 10:55 am
[...] Know your budget You can read more about budgeting here or at Newly Corporate. It’s not as hard as it sounds, and it’s a crucial step in living a rich life. Without [...]
February 14th, 2008 at 8:56 am
You may want to look into . They do not store any of your account information or passwords. Ever. But provide you a means to have a consolidated look at your expenses and offer a community insight on how to improve your spending.
February 14th, 2008 at 12:06 pm
I messed up the URL embedding above. I was trying to point out Wesabe’s Data Bill of Rights. Wesabe is an online community that helps you make better financial decisions about your money. Wesabe doesn’t store any password or financial account information.
February 15th, 2008 at 3:11 pm
[...] February 15, 2008 I’m bad with money. I’ve seriously considered implementing Newly Corporate’s wallet trick. [...]
March 11th, 2008 at 6:33 am
[...] * Newly Corporate: 3 Fast And Easy Budgeting Methods [...]
August 21st, 2008 at 2:30 pm
[...] are many tools for tracking your budget that we have written about in posts like 3 Fast and Easy Budgeting Methods and Budget Budget Budget! , the key though is actually using them! Maintain them, check them [...]