A Collection of Online Budgeting Tools

As you know, I'm a big fan of budgeting. It's helped us agree on purchases since we've gotten married, helped us not overspend, and also given us a bit of freedom to spend in a few areas. After updating our budget today, I figured I'd share our favorite online tool with you, as well as a few others that we've looked into.

PearBudget is our favorite and what we're currently using. It costs $3/month, but saves us much more than that in time, energy, and probably what we spend, too. After using our one month free trial, we knew that it worked for us and signed on up for it. It's super simple interface lets you customize as much as you need, without being confusing, and it also works well with cash or debit/credit purchases.

Mint.com is great for a lot of people I know. It's free, which is great. We've given it a try, but it just didn't fit our budgeting system. It has the added benefit of automatically pulling in transactions from your bank account, which works great if most of your purchases are made using a credit or debit card. You can also split transactions into separate categories. About the only complaint I have with Mint is that we like to carry money forward from one month to the next if there's some leftover, and I can't seem to figure out how to make this work using Mint.

Moneywell is another program I'd like to try. It's available only for Macs, and like Mint, it automatically pulls in your banking information. It claims to be a type of electronic envelope system, which sounds like it would line up well with our budgeting system. It has a free trial, which I need to use, and then a one time cost of $50.

I know there are more, but these are ones I've been impressed with in some way. Any other ideas? What do you use for budgeting?

Newlywed Tip #3: Creating a Budget Part Two

In my last post about creating a budget, I addressed reasons why to create one. This post will get a little more detailed on how to actually create a budget.

6 steps to creating a budget

1. The most important thing is that your budget must work for you! This may seem obvious, but if you try to use someone else's system and it's too complicated or too simple, you'll find that you aren't actually sticking to your budget. Keep this in mind while reading the rest of this post.

2. You have to decide what time frame works best for your budget. Most people tend to use a monthly budget, but if you get paid every week and prefer a weekly budget, then that's great, too! Here's one helpful suggestion from my sister: If you get paid bi-weekly, use 2 weeks of pay as your monthly income. Then, two months out of the year, you'll receive three paychecks that month. Since you haven't budgeted for this, it's like a bonus and can be put toward extra savings or some other special goal.

3. Decide which categories you would like to include in your budget. Keep it simple - having too many categories can be overwhelming. Make sure to include enough categories to cover all your purchases, though, and especially make sure to include categories for long-term savings such as for a new car, vacation, or gifts. Even though you may not spend in these categories every month, it's important to set some money aside for them.

4. Allocate a certain amount of your income into each category. This website lists some percentage guides for families of different sizes - it's an excellent place to begin when trying to determine how much to allocate to each category. (It also helps by pointing out important categories to include in your budget.) This may be obvious, but make sure you do not allocate more to expenses than you earn!

5. Find a tool to keep track of your budget. Every expense must be tracked in order for the budget to really work. Some people prefer pencil & paper, some prefer a spreadsheet they've created like Excel, some prefer a budget tool. My current personal preference is Pear Budget, a wonderful budget website that is simple yet lets me customize my budget as much as I need. They offer a free 30-day trial, then it costs $3 a month after that. While I try to save as much as possible on unnecessary expenses, I have found that the $3/month saves me a ton of time and I end up with a budget that works and keeps us on target.

6. Finally, be able to adjust! After a few months of budgeting, you may find that you don't spend quite as much on gas as you thought, but that your average power bill is a good bit higher than you accounted for. Step back, look at your numbers, and tweak them a little. Repeat this every so often and it won't be long before you have the best budget for you!

Newlywed Tip #1: Creating a Budget Part One

While these tips are titled "Newlywed Tips", my hope is that they may be beneficial for you even if you've been married longer - they just may have more relevance for newlyweds.

Why create a budget?

As part of our pre-marital counseling, we were supposed to create a workable budget for after we were married. This has proven to be one of THE most useful things for our marriage. We are, I would say, fairly "average" for Americans our age as far as our income goes. However, by actually categorizing where our money goes, we realized how important it is to stick to our budget.

This helps us in a number of ways. I am, by nature, more of a saver than Javier. The budget therefore helps me feel free to spend more money than I might otherwise. I can see that we have allocated a certain amount each month for eating out, so I don't have to feel guilty when we eat out, or think about what else we could be spending the money on, since those "other things" already have money allocated to them in their respective categories.

For Javier, the budget acts more as a restraint. He is more inclined to spend than I am, so this helps him see how much we have available and how much we have left to spend for the month.

We are still in the process of tweaking our budget until it's just right - we have to make sure we have enough allocated to cover all of the bills and not too much in the less necessary categories. However, the budget enhances our communication and also prevents a lot of stress from constantly having to discuss how to spend our money.

I'll write more on this topic later - but if you'd like to see some excellent budget creation resources, check out this page of the Crown Financial Ministries website.