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The following features are
ones to look for when selecting a budgeting method. If you're looking to upgrade an
existing system, assess your current practices, or even design a system of your own from
scratch, the following ideas will give you a head start in your evaluation and selection
process.
1) The system should be fairly easy to run.
If it's too complicated, you'll give up on it quickly and end up with no system at all.
Many budgeting systems require you to fill out dozens and dozens of forms, and/or keep
meticulous records of every penny you spend. It doesn't have to be that complicated!
2) Your budgeting system should be able to be used as a communication tool with
the other members of your household.
Effective money management within a marriage or family is based on good communication.
Your budgeting practices must support and facilitate the communication process.
3) Your budget should allow you to define your goals up front, and then act as an
instrument panel to guide you to success.
Beware of budgets that act like "rear-view mirrors", that only tell you what has
happened to your money in the past. You want a proactive system that gives you the power
of planning and control.
4) If you have a spouse, it should be very easy for either of you to understand
and run the budget at any time.
Even if one person is the "primary" bill-payer, there will be times when the
significant other will have to run things. The hand-off should be effortless.
5) Your budget should be customizable.
Our relationships with money are as individual as all of us are. Your budget should be a
reflection of you and your needs, dreams, and goals.
6) There should be an element of fun to the budget.
Fun or rewards built into your budget will keep it interesting and help keep you committed
to it. Examples of fun elements are saving for a treat or vacation, or getting
"refunds" of spending money back when you pay a check.
7) The budget should be based on organization, not penny-pinching.
Too often, people fall into the trap of thinking that the only way to get ahead is to give
up things. Organization is much more effective, and a necessary first step before you can
judiciously decide what to give up, or before you can decide if you even need to make any
sacrifices.
8) The system should easily and instantly let you know how much spending money you
have.
Between bills, regular payments, savings and investments, taxes, and all the other routine
and not-so-routine assaults on your checkbook, it must be an easy matter to know exactly
how much discretionary spending money you have at any time. This knowledge lets you take
advantage of opportunities, react to emergencies, or perhaps just enjoy a comfortable
evening out.
9) Your budgeting system should continually teach you what's going on rather than
just blindly giving some "rules" to follow.
The goal of any good budgeting system should be to impart understanding. Knowledge is
power.
Jane Chidester is the
author of " BudgetYes! 21st Century Solutions for Taking Control of Your Money
Now!" She also conducts seminars and is a published columnist on personal
budgeting topics. Her website, Budget Central,
is a repository of information and resources on personal budgeting, financial planning,
and household money management - a complete budgeting education. You can contact her at Jane@TulipTreePress.com.
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