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  • PocketGuard for Simple Budgets to Track Spending Set Goals

    • PocketGuard is a free personal finance tool to help you track your spending, create a budget, set goals to save and invest more, and lower your expenses.
    • Monitor for potentially unwanted and unauthorized charges like hidden fees, billing errors, forgotten subscriptions, scams, and fraud.
    • Browse other financial products to see if there are ways to save on your mortgage payments, insurance, or other loans.
  • Goodbudget Digital Envelope Budgeting System

    • Goodbudget is a budget tracker that digitizes the envelope budgeting method.
    • Set a dollar amount that goes towards things like your home payment, auto loan, groceries, and more.
    • Free version with upgrade available.
  • You Need A Budget (YNAB) Zero-Based Budgeting

    YNAB is zero-based budgeting, which can help you break the paycheck-to-paycheck cycle, get out of debt, and save more money.

    • Rule No. 1 of You Need a Budget tool is to “give every dollar a job.”
    • On average, new users save $600 in the first two months and more than $6,000 in the first year. Try it free for 30 days.
  • Mint Budget Tracker and Planner

    Brand:Intuit

    Mint is a free budgeting and financial tracking app that helps you see your overall financial picture and make better decisions.

    Mint is going away and being replaced with Credit Karma.

  • Personal Capital / Budgeting and Money Management

    • Personal Capital budget app is a personal finance management tool allowing you to connect external financial accounts for a comprehensive view of your money in one place.
    • Creates summaries of your spending, net worth, and investment portfolio.
    • Free service with no upgrade or purchase requirements.

What is a budget?

A budget is the itemized summary of income and expenses for a given period of time (monthly, quarterly, annually). A budget helps you visualize how much income is coming in and where your money is being spent.

Why do you need a budget?

Budgeting is always a good idea, it’s better when you’ve defined your goals before starting the process. Budgeting can be tedious but it doesn’t have to be boring. What are the reasons to start a budget? Well, they include:

Need to meet monthly financial obligations

To save money

Eliminate unnecessary spending

Stopping fights about money

Stressing less about finances

Less reliance on credit and limit consumer debt

Debt freedom

Retiring early and more…

Many people feel constrained by the word budget and often associate the term with limiting. Budgets are as much about mindset as they are about financial numbers. Budgeting will help you live within your means and push you towards financial success.

Why Budgeting is Important

A budget helps you understand your cash flow (income and expenses) and gives you the necessary information to make better financial decisions.

A budget can help you achieve many of your financial goals. Don’t think of it as limiting you from doing what you want to do. A budget is a spending plan that determines if it is affordable now or later down the road.

A budget can help you identify areas where you’re mindlessly spending money. It’ll help determine areas to stop spending, cut expenses, and save.

A budget can decrease your stress level because you now have a financial plan of action.

Already have a budget but can’t stick with it? Read this article: Avoid these Budgeting Mistakes

What Budgets Include

Before you create your first realistic budget, you need to know how your spending money and your awareness of financial habits are. An unrealistic budget is nothing more than a fantasy.

The first step of the budgeting process includes a clear understanding of where you’re money is going. Ideally, you want to track your spending for a 30 day period. It’s easier to do so on a monthly basis such as July 1 to July 31. There are a few ways to track your spending like:

Tracking your spending through a simple spreadsheet inputting your expenses each time they occur.

Gather your banking and credit statements and a piece of paper. Write the expenses down.

Use expense tracking software like PocketGuard, Mint, and Truebill.

Now, here’s a way to categorize the flow of money.

Monthly Income. You want to know how much money is actually coming in first.

Monthly Expenses. It includes a list of your monthly obligations such as mortgage/rent, loan payments, utility bills, and discretionary spending.

Financial Goals. Financial goals are monetarily quantifiable aspects of your life. They are things that can be purchased such as goods, experiences, and education. These goals are things like savings goals, homeownership, student loan payoff, or once-in-a-lifetime trips. What are your short-term financial goals? Want to buy a home or a luxury car? Maybe you want to go on a worldwide trip or se

Track and Monitor

Your success in budgeting relies on the ability to track and monitor your progress.

The budget is the blueprint of where you want your money to go. Now, you’ll need to actually track your spending. Using apps like Truebill (read our take on this expense tracking and alert app) can help you keep your budgeting goals in mind.

Now that you understand the importance of budgeting and gathered your documents, it’s time to use the simple 3-Step Budgeting Process.

Want to read a book on budgeting? Check out the books: You Need a Budget and Get Money. These are affiliate links on Amazon that help us keep the site going.

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