Regardless of what your income is, managing your finances can be difficult. Often, what seems like excess income is completely lost in the tumult of countless minor purchases, bills and unexpected expenses. In many cases, this can result in over drafted bank accounts, repossessed property, damaged credit and a really big headache.
Fortunately, problems such as the ones above can usually be avoided – if you use the right tools to manage your finances. To help you develop a strong financial management system, we are going to take a look to six invaluable personal budget tools.
Digital budget tools
The technology of postmodern era has provided us with access to countless resources that can be used with the touch of a button. Some of these budget tools can be used to build a better budget. The most powerful digital budget tools include:
1. Microsoft Excel (or other basic spreadsheet tool)
A big part of maintaining your finances is knowing exactly how much money you are bringing in and how much you are spending. A digital spreadsheet is the perfect resource to get this done. With Microsoft Excel, the most prominent spreadsheet development tool you can enter all of your financial data, make corrections, do updates, make accurate calculations, and even create useful charts and graphs.If you don’t own Microsoft Excel and it isn’t within your current budget to purchase it, there are other similarly powerful spreadsheet tools that you can obtain for free. For example, you can download Open Office, a free Microsoft Office alternative or even use the power of your Google account with Google Docs Spreadsheets.
Knowing the basics of what you are spending and bringing in is great, but in order to develop a solid long-term budget, you need a more detailed picture of your financial health. This is exactly what Mint, a free financial management resource, can do for you.Mint analyzes everything from your monthly bills to your retirement fund; it even help you develop a monthly budget — and warns you if you are not following it. What’s more, it even has a free Android and iOS app for around the clock access.
Non-digital budget tools
Digital budget tools are great, but you still live in an analog world. There are many ways that you can improve your personal budgeting skills without a computer or smartphone. As such, you should take advantage of physical budget management tools as well. Here are the four best non-digital budgeting tools that you can use:
Cold hard cash is one of the most powerful budgeting tools in existence. This is due to the fact that you can physically see your financial reserves dwindling when you use cash instead of thoughtlessly swiping a credit or debit card. This fact will greatly increase your financial awareness as you spend.Also, keep in mind that when you run out of cash, you run out. This means that you cannot accidentally cost yourself dozens, or even hundreds of dollars with an accidental overdraft charge.
You can still run out of cash quickly if you don’t manage it right, and trying to manage a disorganized pile of ones, fives, tens, twenties fifties and hundreds isn’t going to lead you to financial management heaven anytime soon.Fortunately, you don’t need an expensive or complex tool to manage your cash. All you need is envelopes. By using envelopes, you can quickly and easily organize your money by category and how much you can spend in that category. Doing this greatly reduces the frivolous spending.For example, if you set aside $150 for your gas budget, then you have to be much more careful about where and how you drive. Likewise, if you set a specific budget for entertainment, then you cannot be surprised when by how much you spent on the movies in a month.
The best way to accurately analyze and adjust your budget is to not only know how much you spend, but also what you buy; receipts solve this problem for you. This is extremely important, especially for categories that involve small purchases that can quickly add up to overwhelm your finances.
All of the above budget tools are great, but they don’t mean a thing if you do not set aside the time to actually put them to use. As such, your time is the most powerful budgeting tool in your arsenal. Make sure that you are budgeting enough time to manage your finances in an accurate, effective manner. Remember: only a small percentage of your time is required to do a great job with your budget.
Streamlining your finances is possible
Budgeting in a way that protects you from your own mistakes is possible. All you need to do is get started.