Budget … NOW!
We plan weekends, we plan trips, we plan parties and don’t get me started on wedding planning. But, most of us don’t plan our financials – baffling!
I have been budgeting money for as long as I can remember (since I was 6 or 7) and as it has become more difficult over-time (more money, more bills, more saving avenues, etc) I have evolved from writing on envelopes to using excel spread sheets to using Quicken. I’m a firm believer in Quicken and see budgeting as a religion. Why is budgeting important? There are 2 major reasons for me:
Helps to avoid debt – Simply put, budgets give you a plan to spend less than you earn. Although this may seem quite obvious I think we’re all aware of how easy it is to hike up a credit card bill while going out with friends or over-spending on gifts or forgetting about your insurance bill. With a budget (assuming you follow it), this will not happen.
Maximizes savings - By planning your finances you can take a savings first approach rather then spending your money and saving what is left. This is critical in changing your spending habits and facilitating a behavior which is geared towards savings rather than spending.
Budgets often times get the short-end of the stick as people think they restrict what you can spend. I see it completely the opposite – budgets tell you what you can spend on whatever you want. What could be better – you actually know that you can treat yourself to that $100 dinner or a $300 shopping spree rather then the doom and gloom of waiting on the credit card bill.
Stop living in fear and anxiety and create a budget to foster predictable and repeatable savings and spending habits. You’ll make much more sound financial decisions and you’ll sleep better as well.
I’ll be following this up with a blog specifically on Quicken. In the mean-time, What are people using to budget? Has anyone had success with budgeting? What are some tips/tricks that you use to save first?
Automatic deposit to a savings account…
yeah – i do the automatic deposit thing, and every year stretch the transfer to test if i can save more (after all, if you get an increase in pay, it souldn’t be difficult).
it’s the lazy way of doing things :p but i’ve heard good things about quicken.
I’ve never used Quicken Will, but a good, free online tool I use is mint.com. It is a budgeting tool that summarizes all the accounts you choose to give it access to. For instance, I have my checking, savings, 401k, and credit card all linked to it. Then I can see the big picture of my balance sheet, so to speak. You can view all your purchases in groups and categories and even compare yourself vs. national averages. I really have learned a lot about certain areas of my spending habits. Knowing more about a certain areas allows me to budget more accurately. Plus, there are neat extra tools like alerts that can be emailed or texted to you about going over budget in certain areas. Also, notices when bills are due can be sent as well. Check it out! http://www.mint.com
I use mint.com as well Will. It’s been great and has an awesome UI. There is also a site called Geezeo.com which is similar to mint.com but apparently has a social network build into it. I haven’t used this since I found Mint.com first and liked that but I assume it is worth checking into at some point.
I actually checked out mint.com a couple years ago when it was in Beta form. I liked it, but it had a few glitches at the time. It sounds like it is working well for several of you – so I’ll give it another look.
There will be a post coming up regarding Quicken – but its more of how to get started rather then a feature function comparison. I’ll look into mint.com and provide my feedback.
Overall I’m glad to hear that others are using tools to help you manage your money – this is a very enlightening exercise for most!
Are there any fee’s currently for mint.com? Or does it look like they are going for an advertising model?
Thanks for the comments – keep them coming!
No, there are no fees for mint.com; it is free. They generate revenue by having advertising, and in a clever way at that. They have “ways to save” as a feature, which shows you personally relevant credit cards or other financial products that could potentially save you money. For example, on mine it has a comparison of 5 credit cards to apply for.
Everyone that saves is hurting the economy. Sure its human nature to protect your self by hording money, but that works against GDP growth if it is done on a massive scale. http://money.cnn.com/2009/02/12/news/economy/savings_rate/index.htm?postversion=2009021211