The best way to budget is the way that you will follow through. We have used a variety of software over the years when it comes to budgeting. We have used Excel, Google Docs, Quicken, Mint, YNAB, and a number of other apps off and on. There are benefits to many of them but my favorites are YNAB and Google Docs. We will talk about how I use each of them in the coming weeks. Today I just want to give you an overview of each so you can choose the option that fits your needs.
Excel and Google Docs
These are very similar options. Excel has slightly more powerful features but I love how Google Docs syncs seamlessly in the cloud. I use Google Docs to plan and forecast future months. It gives me a 10,000 foot view of what I have coming up. YNAB does this some but this is a different picture of it. I linked to a sample copy of what I use above.
I used Quicken a number of years ago. The software has changed significantly since I last used it. It is the most feature rich of the software I am going to discuss. For most people, especially if you are on a Single Income, chances are you don’t need the features. It also take a lot more work to do Zero Based Budgeting (which I’ll explain below).
This is a free tracking and budgeting program. Before switching to YNAB this is primarily how I budgeted. It worked okay for us. There are some good features (it’s free, it automatically categorizes transactions, it also links to almost any account you have, including your bills). What it doesn’t do is force you to look at your transactions or use a zero based budget strategy.
YNAB (You Need A Budget)
As even my daughter will tell you, I am a huge YNAB fan. They do many things really well. YNAB is set up to only allow you to budget for the money you actually have. At first it took time to get used to this; I still use Google Docs for forecasting months in advance. When I look at YNAB, I can trust that if there is money in that category, I can spend it, which provides a peace of mind.
They have 4 rules which I think make perfect sense. One rule I love is the idea of aging your money. How much peace of mind would you have if the money you got paid this week was going to pay for expenses at the end of March. That sounds great, doesn’t it? It took us a little over 4 months to get there but now I am not stressed about what bills I can pay with this paycheck.
Whatever you choose, I would make sure that you are using a zero based budget. A zero based budget means that every dollar that comes in needs to be given a job or a task. A dollar that doesn’t have anything to do is likely to wander off without you even knowing what happened.
EVERY DOLLAR NEEDS A PLACE