Easy Ways to Budget Your Monthly Expenses

So you’re all pumped up and ready to manage your cash finances…and then you find out the latest Microsoft or Intuit budgeting software costs hundreds of dollars.  No need to be discouraged—there are many more “low-tech” ways of managing your monthly cash finances. 

All you actually need to start low-tech budgeting and freeing up some cash is a pen and paper.  Whether you use a pencil and paper or a spreadsheet program, the point is you must write all these cash figures down for monthly budgeting.  Knowing how much money you have, and regularly referring to your anticipated budget will help you free up cash reserves and get you out of debt. 

Save all of your cash and check expense receipts so you can refer to them when making new budget statements, cash flow statements and predicted expenses.  Do the same thing for income.  Figure out where you can cut down on cash expenses and increase your income.  Don’t deprive yourself of every good thing, but keep a balanced and realistic view of your cash supplies. Stick to your budget religiously.  Plan for every expense and anticipate “unexpected expenses.” 

The best way to start a budget is by tracking your cash finances over a period of many months – a year if possible.  Being aware of your cash spending habits is the all-important first step.  If you have a problem with spending cash you haven’t yet earned yet, talk to your creditors about moving the due date forward. 

Finally, let’s discuss the problematic “entertainment” account, that is, the cash reserves we tend to splurge on whenever the impulse or “emergency” arises.  Instead of turning a blind eye to your budget and crossing your fingers that everything will work out at the end of the month, do the math ahead of time and work out what you can sacrifice from your existing budget to afford the item you want. 

A great way to train yourself to spend only what you have is to sit down with a pen and paper and work out realistically what ‘spending money’ you have left each month once all essential expenses have been taken out.  Then, withdraw a fixed amount of cash determined by your budget and spend only what you have.  You can withdraw all your spending money monthly, divide it up into weekly envelopes of ‘me money’ and spend one envelope a week on whatever you want.  Once the envelope is empty, no more spending on non-essentials until next week.  If you find yourself constantly ‘borrowing’ money from next week’s envelope, realize that you have a problem and talk to friends, family or debt help counseling until you have your spending impulses back under control.  

You don’t need a computer to start a budget.  All you need is a pen, paper, a box for storing receipts, and a willingness to see the project through.  And the best time to start is today.