Practical Budgeting Tips to Manage Your Money Better

I’ve been a long-time fan of the Crown Financial Ministries monthly income and expenses budgeting form which is organized by category and subcategories. Dave Ramsey has a similar planning form.  No matter which one you choose, you’ll find they both are solid tools in helping you consider all the monthly expenses you might encounter. Organizing a budget using these forms also helps you budget every dollar and insures your budget is in balance (income equaling expenses). Budgeting by category is a proven method that works well.  You can also layer envelope budgeting on top of it which turns each category into an envelope funded each month with your planned amount.  You know the envelope budgeting process , so I won’t bore you with further details.  All this being said, do you think planning by category and envelope budgeting techniques are sufficient to proactively managing your money each month? Are you better off if you can layer on yet another technique or two to help you manage your money, as long as you don’t over complicate matters?  Let me offer you a couple of other practical tips. 3 Main Budgeting Categories I’ve recently reviewed our budget and reorganized it.  The traditional categories have helped us stay on track with our spending plan each month because we’ve captured all of our expenses and use envelope budgeting.  However, we now group all expenses into 3 main categories.  Here are the categories: Giving & Saving, Bills, and Other Expenses.   For example, there is no longer a Housing category that contains the following:  yard maintenance (fertilizer, etc.), electric, water, mortgage, etc.  The bills such as mortgage, electric and water are grouped under Bills.  Yard maintenance is in the other expenses spending group. Why does this work?  Each month we budget Giving & Saving and Bills per paycheck.  This is the easy part of budgeting. These are set amounts we know we can’t deviate from or we’re going to be in trouble.  The hard part is figuring out how we’re going to budget the remaining Other Expenses.  These are all the expenses that we know we could encounter during the month and we have a long list of them based on past experience.  We review the list and decide how we’re going to use our remaining money after we’ve given, saved and paid the bills.  Sometimes those are tough decisions as what we once felt were important expenses are sacrificed so that we only spend the money we have available to us and remaining in our budget. Budget by Time There is yet another way you can organize your budget that is helpful.  When you create a monthly budget you’re budgeting by time.  You decide how much money you can spend for the given month.  But you can take this one step further.  You can do as I described above with the 3 categories, grouping your budgeting by Giving & Saving, Bills, and Other Expenses.  Of the remaining Other Expenses you then decide how much you’re going to spend each week.  For example, you might decide you have $500 available for the family food budget.  You can then divide this $600 by week so you manage approximately $200 per week. Overall you should have a weekly budget which you may find to not be as overwhelming as a monthly budget with a larger balance which can be more tempting to spend.  You may also find it stimulates more conversation between you and your spouse, if married, because you’re both working to stay on track of the weekly goal.  After the week is over you take a few minutes to review your plan for the next week. Hopefully, these budgeting techniques will help you manage your money better each month and insure you don’t over spend.  I’ve used a couple of good money management software programs that help make this job easier.  Both Mvelopes and YNAB are great products to use.  My wife and I currently use YNAB which makes it easy for us to decide how we’re going to spend money after Giving & Saving and Bills each paycheck.  We can then hold each other accountable to our spending goals. What do you think about these budgeting techniques? Photo by  stevendepolo Related Articles: Envelope Budgeting: A Closer Look Setting A Monthly Budget: What’s The Most Efficient Method? Cash Envelope Budgeting: A Modified Approach to Control Spending 10 tips for a better budget 4 Simple Steps to Proactively Manage Your Money How to budget with the envelope system 5 Essential Budgeting Categories – How You Should Fund Your Budget Read more from Jason Price at OneMoneyDesign.com, a personal finance blog based on Christian stewardship and biblical principles for managing money. You can also find Jason on Twitter , Facebook and sharing social media and blogging tips at SocialTechTips.com The articles on this site are for entertainment purposes and should not be taken as financial advice. Please contact a financial professional for specific advice regarding your situation. Also, many of the CPF articles help us pay the bills by using affiliate relationships with Amazon, Google, eBay and others. Find out more here .

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Practical Budgeting Tips to Manage Your Money Better

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