It's time to get on Budget

It's 2011 and one of the most popular New Year's Resolutions is to get out of debt. The most powerful tool we've found to manage our spending has been a personalized budget. Nope, it doesn't sound sexy, and nope, it isn't always easy. But it is the only way to make your money do what you want it to do. 

THE IMPORTANCE OF BUDGETING

Your financial success is never about how much you earn, but how much you keep and save.

Every successful business utilizes a system to manage their spending – it helps them stay profitable. Every family should do the same thing. Is your family turning a profit, breaking even or going in the hole? If you don’t have a system for tracking and spending your money (a Budget—nope, we're not talking about a noose around your neck or living a life of deprivation) then check out that chapter in our first book America’s Cheapest Family Gets You Right On The Money. We’ve been told that it is the simplest and easiest budget system most people have ever read about and it is the single most powerful tool we have used to reach our financial goals . . . it helped us pay off our first house in just 9 years, pay cash for all of our cars and control our other living expenses so that we always have an excess.

We keep track of our expenses the “old fashioned” way with pencil and paper as described in our first book and in this article on our website (for website subscribers). Basically we put our money in a checking account and record every expense in our checkbook. Two times each month all of the expenses are transfered to 20 different budget category sheets. Some of our categories are: Mortgage, Food, Clothes, Insurance, Medical, Home Repair, Pets, Recreation and more. Every expense has to come out of one of the budget categories. And when we add up all of the individual account totals it equals exactly the amount of money in the checking account.

This budgeting tool was what enabled us to pay off our first home in 9 years and to pay cash for all of our cars. It really works!

Computer Budgeting

If you’re more into computer-based budgets, you might want to consider  Mvelopes.com. This is the best computer-based budgeting system we’ve seen. Mvelopes uses the same system we describe in our book. It's better than Quicken and MS Money, both of which only track your spending after the fact. Mvelopes helps you save money in advance of your purchases. That's exactly what we've been doing since 1982.

The cool thing about Mvelopes.com is that you link it your bank account(s) and whenever you spend money it is recorded in the Mvelopes.com program. You don’t have to enter an expense, all you have to do is tell Mvelopes which budget account the expense should be applied to. Friends who have used it say:“I’ve been able to cut my expenses by 15 percent by just knowing where all of my money is going.” And another said,“It was a little hard to get the accounts set up the way we wanted them, but once we got that done, it worked better than our old excel spread sheet.” 

Mvelopes.com is also recommended by David Bach, author of the Automatic Millionaire and by Crown Financial Ministries.

If you’re still not sure, you can try MVelopes.com for f*ree for 14 days. Your costs after that will be between $8 and $14 per month depending on how you set up your payment. You’ll easily save the cost of the program.

If you want to try a totally f*ree budgeting system check out Mint.com. Their budget system is the standard, track what you spend after you’ve spent it, but it doesn’t allow you to save in advance for purchases.

There are three good things about Mint.com:

1) It’s f*ree;

2) Based on your spending they’ll send you alternate sources for things like cell phone, car insurance and groceries. 

3) Similar to Mvelopes.com you link your bank account to Mint.com and it records your spending — all you have to do is allocate each expense to a particular budget category.

More important than which program you use—paper, Mvelopes, Mint or something else—is the discipline of regularly consulting and updating your budget. A budget is only effective if you regularly refer to it and adjust your spending according to what you have to spend.

For our family, our budget has been the single most effective money saving tool we’ve ever used.

We've been told by many people that our first book,America's Cheapest Family Gets You Right on The Money has one of the easiest to understand and impliment descriptions of how to set up and maintain a working family budget. Plus we show you how to save money in just about every category of a typical family household budget.

Make 2011 the year that debt is eliminated from your life and replaced by a healthy, positive balance in the bank!