Whenever I talk to others about budgeting, I get asked for a recommendation for a budgeting system. (In fact, it just happened this weekend at our family reunion.) I haven’t found a magical budgeting system that will make us manage our money, but there are a lot of great tools that can assist us. Although it is a hobby of mine to try out personal finance apps and software, I don’t give a recommendation until I understand what that particular person needs. If you were to ask what kind of jeans I recommended, I could tell you, but my style may or may not be your style. There isn’t a one-size-fits-all system for managing your money.
So when I’m asked for a recommendation, I respond with questions. Please answer these, and you’ll be closer to finding a system that works well for you.
What do you want it to do?
I’m a nerd when it comes to finances. I can spend hours talking about finances. I have accounting degrees. I love spreadsheets, reports, and details. However, I’ve taken enough personality tests and known enough people to understand that not everyone is this way. I still think that budgeting is for everyone, but everyone needs to budget in their own way. Some people want more powerful software that does reports and details. Some like to do the work all themselves in programs like Excel. Others are super intimidated by Excel and need a simple budgeting app. For example, EveryDollar is strictly a budgeting app that I would recommend to those people. Understanding your personality is key to finding the budgeting system that works for you. I recently went to a presentation by Social Core. Check it out if you want to understand personalities better. Once you understand your personality apply it to budgeting.
How much time do you want to spend budgeting?
Budgeting really doesn’t take much time. Even detailed money management systems take under 10 minutes a day, but some have the capability of downloading your data (Mint, YNAB, Mvelopes, EveryDollar), which could save you time. For a long time, I used Excel because I liked it the most. I love to see other people’s Excel spreadsheets that they made. (I told you that I am a nerd. I’m cool with accepting this.) But, Excel does take time to learn and to use. Some people wouldn’t budget if they had to use Excel. These people could try out Peaks Money Manager or EveryDollar. These apps focus on budgeting and make it very simple. Again, your personality comes into play here. Detail oriented people are more likely to want to spend more time. Other personalities want to spend as little time as possible on managing their money.
Do you want support?
Learning new technology can be frustrating and even scary. Having support can be the difference between quitting and succeeding. Some systems have excellent support teams that answer questions when the program won’t do what you want it to do, or when other technical difficulties arise. Other systems won’t have as much support.
What does your spouse want?
If you are married, budgeting needs to be a team sport — not an individual one, but everyone can have different roles on the team. My husband is not a budgeting nerd like I am. He’s extremely supportive — even though he has fallen asleep during my budgeting meeting. Although I loved using Excel, I eventually switched over to Mvelopes and then YNAB. Lately, I’ve started trying out Peaks Money Manager to see if this sytem will work best for us as a couple. I’m happy to do all of the finances, but I know that it is better when we are both involved. Even though my husband knows how to use Excel, he didn’t ever enter in transactions into our Excel spreadsheet or look at our budget except during our budget meetings. So, I tried out other programs and found out that he will enter transactions into YNAB from his phone. Peaks Money Manager is an app that would allow him to do this too.
Do you prefer to use technology?
Budgeting existed long before computers, apps, and smart watches did. I often tell people that if they like pen and paper budgeting systems the best, there is nothing wrong with that! Technology has great tools available to assist you in managing your money, but it isn’t necessary. If you like to write out everything in ledgers- great! "Just Do It!" "Have It Your Way!" What other slogans can I quote to convince you to manage your money? Apps are great tools if they work for you. Paper budgeting systems are great, if it works for you. Budgeting software is great, if it works for you!
I suggest you try some of these budgeting systems out to find out which works best for you. Some of these are free or have a free version. Others give you a free trial period. All of these are affordable. Dive in! Trial and error is the best method to figure it out which budgeting system is best for you. I promise that you won’t break anything! Do you have budgeting tool that works great for you? If you post it, I’ll try it out.