How I Budget

I’ve made some pretty significant changes to the way I’ve been budgeting lately.  Previously, I kept a really robust spreadsheet of all my income and costs, and tracked where my money was going down to the penny.  I would sit at the beginning of each month and track my financial decisions using Mint and would use those purchases to guide me in deciding what my budget for the next month would be.

And after I created my budget for the next month, I would save and close the spreadsheet, and wouldn’t open it back up until I was ready to repeat the same process over.  It may have been one of the most ineffective processes I’ve employed to date.

How I Budget

Understanding that the budget I was creating at the beginning of the month was doing me no good, I decided to simplify the process a little bit.  I did put a lot of thought into what my budget for each expense would be, but I was lacking the visibility to see exactly what my budget was on a daily basis.  I am aware the envelope system would be a way to alleviate this, but everything I spend money on is an automated deduction other than food and gas.

My solution?  A simple checklist/notetaking app on my phone.  I’ve found Google Keep to very useful, as it’s always available on my phone and it syncs to my computer.  Really, any simple note taking app with a checklist will work.

In my quick budget note, I have a checklist of exactly when my money will be entering and leaving my checking account.  I’m able to calculate when and where my money will come and go, and this allows me to calculate exactly how much money I should have in my account at any given time.  This comes in handy when I get the urge to buy something in the moment, I can check my account and see if it’s feasible (usually it isn’t because I budget every dollar.)  It’s really easy to keep up with, once I’ve spent the money on the budget, I check it off the checklist and move on to the next expense.

So far this process has been working for me, it’s simple and straightforward and I actually check my Google Keep (whereas I almost never checked the spreadsheet.)

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