3 Budget Making Systems You Must Know
So don’t let budgeting systems be the one thing that keeps you from budgeting on a consistent basis. You don’t have to rewire your brain to align with the right method—because there are no right or wrong ways to budget. One of them will work for you.
1. CASH ENVELOPE SYSTEM
With the cash envelope system, you decide how much you need to take out each week, in cash, for each of your budget categories. Then you distribute cash among each of your category envelopes and take your envelopes to the store when you need to buy something. When the cash is gone, it’s gone. A lot of people find it’s harder to spend physical cash, which is one of the things that makes this budgeting system so successful!
With traditional pen and paper, you start by setting an amount for each category, and as you make a purchase, you subtract that amount from what you originally budgeted so you have a running total of what’s leftover to spend in that particular category. This is budgeting made easy. All you need is a pen and paper.
3. EXCEL OR GOOGLE SPREADSHEET
This is one of our favorite ways to budget and we used it for years. Spreadsheets work the same way as a paper ledger, except with a few simple formulas, the spreadsheet does all the math for you automatically. If you want to take this a step further, you can set up your tracking system in such a way that what is leftover in each of your categories should equal the money in your actual bank account.