Is budget a four letter word?

In case you are wondering if I am about to go PG-13 with this post, let me reassure you that the word in question is BUDGET. If that word makes your eyes twitch and you feel like you should stop reading this post and start dusting the coils on your refrigerator, reading “War and Peace” or alphabetizing your spice rack – let me ask you one question. Ever wonder why there is more month than money? If that is the case for you, I highly recommend that you give this BUDGET idea some serious consideration.

Budgets do not have to be complicated. A basic budget helps you get on track and stay on track. I like to think of my budget as a spending plan. It is an accounting of income and expenses over a specific time period. There are many tools available to help you get started and to monitor your plan.

Here are a few of my favorite tools:

Mint.com is a great tool for tracking your net worth and spending. Mint does a lot of the heavy lifting by organizing and categorizing your spending. This site allows you to pool together all your financial data in one place so that you have a snapshot of YOUR big financial picture. You can sign up for alerts to help keep you on track so that you do not overspend in a given category.  This is an ideal solution for people who are too busy to maintain and update data. You can be up and running relatively quickly depending on the number of accounts that you have established. Squeamish about security or privacy? Mint is a read-only and offers bank level security. I encourage you to read the FAQ’s and make sure you are comfortable before signing up for your free account.

Free budget templates – If you perform a basic Internet search, you can find a host of templates. One of my favorites is Vertex42. There are simple versions and a more robust household version. There is even a version for college students. Got debt? They also offer an amazing debt reduction calculator that allows you to look at various scenarios and options for eliminating your debt.

The Happiness Spreadsheet by Cathy Curtis – I always recommend that you factor in a bit of fun to your budget. The amount will vary with your income and expenses but I find that if you do not allow for this – it is hard to stay on track long-term. Curtis links spending, values and happiness. When you create a budget that is aligned with your values and income level – you have a greater likelihood of achieving financial success. The book contains exercises to easily guide you through this process. I am a huge believer in a values based approach to financial planning and this is a great tool to help you build a better budget.

These are just a few suggestions. The important thing is to get started TODAY.  Once you have created a budget, then you can move into the monitoring and adjusting period. You will start to build up data and see where maybe you left off a category or you need to increase or decrease spending based on actual expenses.  It is important to track projected versus actual spending. This will keep you focused and on track.