In a recent post I told the story of how I am giving our family a complete overhaul. In order to accomplish this I have to look at my strengths and weaknesses. I also need to give each area overhaul it’s own block of time and not rush myself. This is vital because if I become overwhelmed, I will give up and nothing will change. I have tentatively decided to give each area a week to research and put a plan in place, accepting that there will be a lot of time afterwards to tweak. Since tomorrow is payday, I will begin with budgeting.

I am a person of lists. I also need to have these lists accessible, which makes pen and paper (or neat printouts) mandatory. I need to be able to see things at a glance, to see the big picture. Computers do not satisfy me like a good, written list or chart, although I do use money management software instead of a written check register.

In order for me to stick to a budget, it needs to be realistic and able to be managed easily. If I don’t have categories and a system that I can ’see at a glance’ it won’t be adhered to.

First, I need to decide what kind of system will work best for me. There are a myriad of systems available based on what type of person you are and how much help you need. I need to have a system that is completely customizable and in depth. I am a big fan of Dave Ramsey’s advice, which seems to fit my generation’s need for instant gratification so many of the links I provide are from his site.

There are several different methods depending on your personality and lifestyle. Here I will outline just a few with my impressions. First is the Envelope Method. This method has been proven to be successful for a number of people, from what I have found. It is especially helpful if you are paying down debt as it deals with cash. Did you know that studies have shown that when we use plastic to pay for things, be it debit or credit, we spend approximately 20% more on our purchases? This method would help alleviate that. You basically budget each paycheck, divide the money up into your envelopes according to said budget and when the money in the envelope is gone, you stop spending in that category until the next month or cycle. There is even a web based version available which varies in price from $13.20 per month to $7.90, if this appeals to you. Since our bills are paid via the web and we bank with USAA, which is not local, this is not the best option for us.

Edited to say…I did forget to include a link to another program that is highly recommended. PearBudget is an extremely simple, web-based budgeting tool. It allows for basic categories, but also allows you to create your own in different sections. It also allows you to include irregular expenses and auto-calculates how much you should be saving per month to meet those obligations over 1 year. It offers the best free trial ever, immediate access and you don’t have to register or input any kind of payment information and cancel later if you don’t like it. Lastly, if you do like it, you can use it for $3 per month.

Next, there are many different forms or Excel workbooks to print out and use. The benefit of using a computer program is the ability to auto-calculate and make changes easily, but it is something that requires effort, what with the booting of the ‘puter and stuff. Paper forms are portable and usually allow you to see the big picture easily but, of course, space is limited if you want to do the ‘at a glance’ thing. The link provides access to a couple of worksheets but if you are ambitious, you can use these as a starting point to make your own customized workbook or document, adding and eliminating as you need to.

There are others but these were the options that I considered. I have decided on a third, more viable option. I am already in the habit of using my money management software and this program allows for budgeting. I download all of my account information right into the program, it has already memorized categories for most transactions and I can break things down even further and assign dollar amounts to each category. Keeping things simple is very important to me and, since I already use the software on a daily basis, this is the easiest option and will do everything I need it to. Including my beloved charts and graphs.

After my day of organizing the overhaul in general, I’m ready for some down time. Tomorrow I will tackle the actual budget and how to work it via MS Money Plus Deluxe. Hopefully I will have success to report!