Wednesday, May 7, 2008

I needed a budget!

One of my New Year resolutions for 2008 was to start keeping a monthly budget and tracking all of my expenditures for the year, beginning in February. This was quite a challenging goal for me, as I've never been able to keep up this type of constant commitment for long, as evidenced by the countless aborted journals, sporadically-updated blogs, and ruefully-abandoned exercise plans I've had in my life.

Thus, I'm very happy to report that, as of May 1, I've now kept up my budget and expense tracking for a full 3 months! It's a truly great feeling to know, not just guess or hope, that I'm spending less than I make and putting aside money for longer term goals. Also, the budgeting and expense recording is actually much easier and less time-consuming than I had originally thought - and after 3 months, has now become a habit.

I'm using a tool called You Need A Budget (YNAB) for the budgeting and tracking - basically a souped-up Excel sheet with some budgeting philosophies built-in. YNAB costs $20 for the basic version, but the built-in functionality has made the process much quicker and less painful - and thus easier to keep up! - than it could have been. However, a homemade Excel sheet or free pre-built tool will also get the job done. (One tool I have heard good things about is PearBudget, although I've never used it myself.)

For those who are fortunate enough to not be in debt or living paycheck-to-paycheck, maintaining a budget and keeping track of all expenditures may seem like overkill for a problem that doesn't exist. However, the process itself is invaluable as it forces me to actively think about and manage my finances, and take ownership of everything I make and spend. Since I know exactly where every dollar goes, it keeps me from ever feeling like my money just disappears. Plus, it gives me historical data of my spending patterns, and that should be really fun to play with for a numbers geek like me!

No comments: