There’s not an app for that (personal budgeting, that is).
Aren’t there tons of apps you can use to manage your money? Yes, and no. There are plenty of apps that will import your credit card, debit card, bank, and other financial info and “track” your spending. Of course, you have to spend a bunch of time setting them up and then re-classifying your transactions because, for example, how do they know that when you bought some tacos at your local gas station that should have been categorized as “restaurants” instead of “gas”. They don’t. The apps do pretty well on some categories and not so well on others, but you have to be diligent about checking and correcting the decisions they are making, and only then can they help you track spending categories and send you alerts when you are overspending.
That’s all good, but that is not really budgeting, in our view. Budgeting is a process of first understanding your spending, both necessary and discretionary; second, knowing your income; third, deciding how you want to use your income (not more than your income) on the various necessary and discretionary spending categories; and fourth, setting up a system to track your monthly spending to make sure you are doing what you say you want to do.
Spending can go up and down each month. Is it bad to overspend? In the app world, yes, in the real world, not really, if you’ve planned for it. If you view each spending category as a “savings bucket”, you can deal with the ups and downs of your spending patterns. We’ve found that the best tool to use is a simple spreadsheet. If you sign up for a free monthly newsletter we’ll send you a free spreadsheet to get you started.
A recent Wall Street Journal video called “Want to Stick to a Budget? Some Advisers Say Skip the Apps” suggested that “… a spreadsheet may be more effective at helping people maintain a budget.” We wholeheartedly agree and have seen it work time and time again.
In addition to a spreadsheet, many people also need a friend, mentor, or coach to help them get started and keep going for the long haul. We can help!
If you’re feeling overwhelmed, hate spreadsheets, and don’t know how to get started, let us help! Contact Us Here.
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