Introduction to Budgeting, Part 2: Budget Strategies
Now that you know the value of an effective household budget and have learned some basics about what you should achieve in creating your budget, you can decide the best way to move forward with implementing a budget in your household. At a basic level, you want to choose a method that makes it as easy as possible to keep up with your budget, since maintaining consistency is where most consumers struggle with budgeting. If you choose a system that really works for you, you are more likely to stay committed to your budget.
If you’re having trouble sticking to your budget because your debt payments are eating through your income too quickly each month, we can help you get back on the right financial path. Call Consolidated Credit at 1-800-320-9929 to speak with a certified credit counselor about your financial situation today. The counselor can evaluate your debts and help you create a plan to get back on track. If you prefer, you can get started online with a request for a Free Debt Analysis.
Choosing Your Budgeting Method
Budgeting doesn’t have to be a hassle when you do it in a way that works for you. With the creation and improvement of budgeting software and online budgeting platforms, long gone are the days of avoiding budgeting because it’s too tedious. If you find pen and paper budgeting tiresome and too time-consuming to work for your busy schedule, consider getting budgeting software for your home computer, using an online platform or downloading a budgeting app from your bank.
The following options can be used to support your budget strategy:
- Traditional pen-and-paper budgeting – convenient for consumers that prefer
working without a computer
- Custom spreadsheet budgeting – allows you to fully customize your budget
strategy, set your own budget categories and your own spending goals
- Budgeting software – provides an easy way to keep your budget electronically
without putting sensitive financial information out online
- Online budgeting platforms through your bank – many banks and financial institutions
have implemented budgeting platforms as part of their online banking systems; these
services are usually free to use for clients of that institution and fully integrated
with your account information
- Online budgeting platforms through independent third parties – allow you
to consolidate financial information from multiple sources in one convenient location,
so you can view all your accounts in one place without a hassle
- Budgeting applications for smart phones – now typically offered with budgeting software and online platforms; allows you to keep your financial information and budget on hand at all times, no matter your location
The right budgeting method is different for every consumer. Choosing the right method that works with your lifestyle and the ways you already manage your money will help you stay committed and on track with your budget. Choosing the wrong method can cause you to lose motivation to the point where you start ignoring your spending again.
If you decide to use pen-and-paper budgeting, the following worksheets can help you get started:
What You Need in a Budget Strategy
No matter which method you choose, there are some basic elements that will be part of any budget strategy you create. An accurate household budget should always be able to provide the following in any given month:
- Combined household income level
- Total debt load
- Personal debt-to-income ratio
- Credit card debt ratio
- Personal savings rate
- Expense ranges (for example, how much money spent on your gas bill)
You should divide your bills, obligations and expenses in a way that makes sense for you and helps you understand how your money is spent each month. Many consumers choose to divide expenses by necessary versus unnecessary; some choose to separate bill payments from other expenses; some choose to divide everything by expense category, regardless of whether the money was spent in cash or on credit. Whatever strategy that makes it easier for you to budget is the strategy you should use to help ensure budgeting success.
Don’t Let Debt Hold You Back
If you’re still not sure if you need a budget, continue reading with Part 3: Budgeting Myths or start creating your budget now with our next section, Budgeting Made Easy. Budgeting can be tough, but it’s even tougher when you’re trying to stay ahead of too many debt payments. If you’re struggling to stick to a budget because you have more debt than what you can manage easily in your budget, call Consolidated Credit today at 1-800-320-9929 to speak with a certified credit counselor. You can also take the first step online by completing a request for a Free Debt Analysis.