As we continue this week’s theme of budgeting, I want to share some of the tools we use for creating and maintaining our family budget. Last month, during the 50/50 Challenge I was asked a questions about budget software from Darris:
…I’d love an update on budget software. I use Mint and love it because it’s free. I used Quicken and QuickBooks for years and then bought an iMac and wasn’t happy with how either worked. I’d love to hear other Mac users thoughts. I also use the ‘envelope system’ that I’ve devised myself and LOVE it. Now if I can just get my husband on board . . .
I won’t highlight all options available (too many to count), but besides what we use I’ll mention a couple of other options based on what I’ve heard from others and discovered myself. I hope it will be useful as you create your 2012 family budget.
How We Create a Family Budget
Creating a realistic budget is a relatively straight forward project for us. We’ve been married for about 5 years so we’ve developed a little bit of a system.
Track your actual expenses.For a budget to work, we need it to be based on our actual family’s needs, so we use tools like Mint or Quicken to see where our money went.
Review your actual expenses. We sat down last night and talked about what the numbers were for different categories.
Create a doable budget. We then pull out the spreadsheet and create a basic budget.
Update your bill pay. For those regular and recurring expenses we go ahead and get the automated bill pay done. Savings and extra payments are also automated if applicable.
Review and adjust.Getting a budget done just right on the first time isn’t always the case. Most of the time we have to tweak it just a bit to get working.
We’re getting better with budgeting, but it still takes time. Doing the budget together is something that helps us to get on the same financial page for the upcoming year.
Google Docs and Templates Plus Quicken
We’ve been using a Google Docs spreadsheet that we share for our family budget. It’s served us well, but we hadn’t updated it in about two years.
When we review our actual spending in 2011, I noticed that for the most part we’ve stayed about the same with our monthly expenses. The big exceptions are baby stuff (about $40/month) and the extra mortgage payments (right now it’s at $175/month). We spend more for personal care now, but our gas bill for the house dropped dramatically for example.
I tried to see if I could export Mint’s data to a spreadsheet, but I couldn’t find a way, so I fired up Quicken to get a report of where our money went. I currently use 2011 Quicken Premier and it’s a very handy tool. If you’re looking for a practical budgeting spreadsheets, I’d like to recommend J. Money’s template.
How We Keep Our Budget
After we agree upon and update our budget, our focus now turns to maintaining it. Staying on top of our spending and spending isn’t too hard as we have a system in place that can give us a snapshot in about 5 minutes and with just a little bit of help with spreadsheets we can calculate our monthly net worth fairly quickly.
Mint – Easy and Free
I think being free and easy are the biggest reasons we use Mint. It’s easy for us as the data from our joint account are automatically pulled and Mint organizes it for us. With a few clicks we can check month to month and we can compare them against each other. You can also drill down to get to the individual transaction. I also love using Mint to track our goals and investments. I check Mint out on a monthly basis to see what our biggest spending categories are to share on on our monthly net worth reviews. If you want to use Mint to manage your budget, I’d say it’s a handy tool to use.
Net Worth Spreadsheet
It’s a great exercise to help us see where we’re doing well and what we can improve on. I use the template from Consumerism Commentary (can’t find the link for the spreadsheet now) for our net worth reviews.
The spreadsheet is pretty easy to fill out and it takes about 10 minutes to login to accounts, get the numbers, and find out what our assets and liabilities are currently.
Great New(er) Option: Manilla
I’ve been hearing about Manilla for a bit now, but it was just recently that I noticed what they offered. If you’re looking for a complete system that can pay your bills Manilla can be helpful.
Depending on who you bank with and your bills there can be a long delay from when you make payments to when they show up paid. I had an extreme example of that with my credit card as one of my banks sent out paper checks and the other one did electronic pay. The difference was a couple of weeks versus 1 day.
If your bank is like the first, then Manilla can speed up and organize your bill process.
Thoughts on Budgeting Tools
If you don’t plan ahead when it comes to your money, then it’s extremely difficult to get ahead. Budgeting is just a method for you to tell your money where to go.
What do you use to keep and maintain your family’s budget? What do you find to be the easiest to use and what do you find to be the most effective for your family? Besides the options I mentioned, what are your thoughts on other budgeting tools?