Do you really need a monthly budget planner

Budget Paper

After a recent conversation with a friend about their financial situation, I remembered monthly budget planners are the best way to keep on top of your spending. It turns out they had a $700 monthly deficit which was being ignored and it didn’t show up until they did a monthly budget plan. Regardless of what people say, we all know when something is wrong with our finances, the only difference is some choose to ignore it. Acting quickly could be the difference between finding $700 for last months shortfall or financing $8400 for last years extra expenses.

So when you have that twinge and uncomfortable feeling that money is flowing out rather than flowing in, it’s time you do a monthly budget plan. A budget helps you to understand where that money is going and allows you to make decisions about future purchases. I have been looking at some budgeting software recently with a view to setting up a space where my readers can track their own budgets so we can all help to get peoples budgets back on track. Watch this space.

There are a few ways to keep track of your spending, one way is by tracking every cent that comes in or goes out and another more relaxed way is to round off to the nearest dollar which gives you a rough estimate. I personally prefer rounding off to the nearest dollar or greater because I’m not looking to check if someone is stealing from me but rather would like a sustainable method that doesn’t penalise me for missing a few purchases here and there. Once you are committed to accounting for every cent,  you’ll have anxiety when you miss a few entries and will most likely give up when the books don’t balance. The key to a successful budget is continuing to maintain it long enough so the data morphs into usable information.

Personally, I became a little complacent last month because even though it was Christmas and I thought my Christmas spending was totally under control my credit card stopped working on Christmas Eve. Instantly I thought there was a mistake or some fraud was currently in progress. But when I checked the transactions with the bank, sure enough there were bills that I had paid off earlier in the credit cycle and plenty of them.

When I’m not too worried about budgeting I can usually reconcile my credit card statement with the bank income because almost everything goes on my credit card; I do earn a few extra frequent flyer miles for each purchase and pay it off so why not. It’s actually a neat way to earn flights for that next holiday, but you must pay the credit card off each month or the interest repayments makes the frequent flyer points worthless.

So it’s back on the budgeting horse for me this month and I need to get my monthly budget planner going again. It’ll enable me to itemise my incoming money and outgoing expenses to get the real idea of what money I’ll be needing to Leave the Wheel. Hopefully, the expenses aren’t too much of a shock but I already have that twinge that says it is. I’m going to need solid saving and earning strategies if I am going to make this happen.

So what type of monthly budget planning do you find it easiest to maintain? Spreadsheet, on-line website or mobile app or just simply through bank statement reconciliation?

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