Managing Money God’s Way

Today I want to look at budgeting in a different way.  I know for me, when the word budget is brought up all I can think of is “BORING”.  I hate to budget.  I hate to have to sit through trying to figure out a budget that is actually going to work.  Do you feel the same way?  So, let’s look at it in a different way.

A Money Plan

Simply stated, budgeting is a money plan.  You are figuring out how you are going to spend your income for the month.  When I look at it as a spending plan, I get a little more excited about it.  If you think about it, failing to put a spending plan together is planning to fail.  Fail at overspending, spending on the wrong things, not saving any money, not paying down debt.

Your spending plan is your roadmap on how you are going to get from debt slave to debt free!

Don’t worry if you do not totally understand where I am going with all of this just yet.  Future posts will fill in the gaps.

One of the first things you will hear from anyone who is helping you with your finances is that you will need a budget. A budget is usually the difference between someone who has their finances under control (as long as they manage to their budget) and someone who doesn’t (like me right now). I have not been staying on top of my budget as of late, and it is coming back to haunt me. If you are like me and hate budgeting, I have a way to get it setup and done that will require about 10 to 15 minutes a week to maintain. This method utilizes the Keep It Simple Stupid principle. It is called Mint.

What You Will Need

1. A computer with internet access.
2. Access to online banking.
3. A Mint.com account.  It is free to signup.
4. A good 2 hours to get it setup.  Once it is setup it will only take 10 to 15 minutes a week to maintain.

Step 1 – Setup your account at Mint.com

Go to Mint.com, signup and begin the process of entering all of your accounts.  You are able to add checking, savings, mortgage, investment, and credit card accounts.  Some of your accounts may not have online access, but enter as many as you can.

Step 2 – Create your starting budget

Use either an excel spreadsheet or good old pen and paper to list your income and expenses.  I happen to use a spreadsheet available at Google Docs.  You can find it here.  So I plug all my budget numbers into the spreadsheet until I get things right.

Step 3 – Create your budget in Mint

Now you can go into Mint and create a budget to watch your spending categories.  This happens on the “Overview” page.  You will see your category names on the left and on the right will be the amounts you decided that you were going to put into each budget category.  You want to stay below this amount each month.

The black line in the middle shoes how far through the month you are with the date at the bottom.  The colored bars show what percentages of your budgets have been spent with the actual amount on the end.  Green means that you have spent less of a percentage than the percentage we are through the month (I.E. we are 50% through the month but I have spent less than 50% of the budget for that category).  Yellow means you have spent higher than the percentage you are through the month.  Finally, orange means you have overspent in that category.

Step 4 – Categorize items on Mint

This is the boring part.  You are going to go to the “Transactions” tab on Mint and put each transaction into a category that corresponds to your budget.  This will help you see where you are at with your budget categories.

Step 5 – Maintain the budget

You will need to go in at least each week and take a few minutes to clean up the transactions to make sure they go into the proper categories.  Now that I have this setup and going, it usually takes me about 10 minutes each week to do this.

When a budget category turns orange or gets close, STOP SPENDING! You need to be reviewing this with your spouse, because you both need to agree that when a category turns orange you are not going to spend anymore money.

If you stick to this it will make budgeting very easy and straight forward.  Trust me, I hate doing this budgeting stuff, but this has made it much easier and quicker for me to get through it.

Also, if you have an iPhone or iTouch, there is a great application that will help you track your Mint budget from whever you are.

Happy Budgeting!

I was sick this weekend so I had some time to contemplate about how our finances were doing, and I realized I was slipping back into some old bad habits.  I have been thinking about our finances lately, but not really wanting to dig to deep.

One thing I notice about this bad habit of mine is that the longer I put off entering transactions into my checkbook program and checking how we are doing against our budget, the harder it becomes to get caught up.  And I don’t mean because I have a lot of transactions to enter, I mean because I am afraid to look!

The difference now is that I can now recognize when this is happening to me and I will make time to make things right; to get caught up on balances, payments, etc.  I call this Budget Procrastination Syndrome or B.P.S. for short.

Symptoms of Budget Procrastination Syndrome

• Your last checking account entry is three weeks old.
• You are not quite sure when your next credit card payment is due.
• You feel a combination of anxiety and apathy towards doing anything financial.

Take it from me, the side effects of B.P.S. can be quite painful, ranging from missing a credit card payment and incurring a late fee, to bouncing a check.  So how can you over come B.P.S?

Home Remedies for Budget Procrastination Syndrome

The simplest cure for B.P.S. is to dive headfirst into your finances.  Try to set aside some time within the next 24 hours to get caught up with your finances.  Gather up your statements, update all outstanding balances in your checkbook and on your debt tracking sheet (you have one don’t you?).  Then start to look ahead at what bills are coming due and make sure you have enough cash on hand.

Sometimes we get so busy doing other things in life that managing our money gets relegated to the “I can do that tomorrow” pile.  Problem is, that tends to stay on that pile for quite a while.  If you feel yourself going down this road, I encourage you to make time today to get caught up.  You will feel a whole lot better if you know what is going on with your finances!