Budgeting Methods – Which Is Best?

Everyone has their preferred methods for budgeting, be it software like Quicken, Excel, a piece of paper or their partner (the easiest, so I’ve heard).  I received an email from a reader this morning inquiring about how I budget my money, and I thought it would be an ideal time to share this information with my readers, and also do some research on free on-line solutions.  I’d also be interested in hearing how all of you manage your budgets.

The first step in setting up a budget is to determine your goals.  Would you like to track your spending?  Get an overview of your finances?  Perhaps become more organized overall?  Each person’s goals are different, and a budget can, and should, be tailored to meet those goals.

If you would like to get a global view of your finances and spending, on-line websites such as Mint and BudgetPulse could work well for your needs.  Each site allows you to upload all of your accounts (checking, savings, credit cards, etc.), keep and eye on trends in your spending and track budget-to-actual numbers.

Geezeo is a another site I’ve just discovered and I must say, I like it MUCH better than Mint.  Accounts are updated faster, the tools are more useful, and it’s interface is just as nice.  The only negative I have discovered is that they are not yet linked to ING.

Quicken Online is now free, and I would suggest this above all other money management web-sites.  I have not yet signed up for it so I cannot offer a review, but I imagine it’s a great resource.  The downside is that you might have to input some of your information.

Other Money Management Sites




Expense Register

Clear Check Book


I highly recommend checking out My Money Dot Gov for information around the basics of financial planning.

Budgeting, The Old Fashioned Way

If, like me, you find software and on-line resources too much (or not enough), I recommend Excel for managing your budget.

Excel is an incredibly useful program that I hope you all are familiar with.  Playing around in Excel totally satisfies my obsessive-compulsive need for precision and neatness.  You see, when it comes to money, I tend to fall into the following trap: EVERYTHING must be correct down to the penny.  If I balance my checkbook and it’s off 43 cents, I will either spend hours trying to figure out the mistake or say “fuck it” and end up overdrawing my account because I choose to ignore it all-together.  I’m very odd in this way.

I’ve managed my budget in Excel for about 4 years now.  So, obviously, a budget will not keep you out of debt or financially responsible.

At the end of each year I set up a workbook, laying out every pay period in the far left column (I am paid bi-weekly).  I then plug in my pre-tax deductions (health care and 401K) and taxes.  I do this because it makes it easier to make changes if I have to take unpaid time off, and I have two “extra” paychecks a year from which my health care expenses are exempt.  In the bottom row each category is totaled.

Budget: Net & Gross Income

Budget: Income Totals

I then dive into my fixed expenses like rent and my car insurance.  I also note when each is due and how it’s paid.  Every expense is deducted monthly, which is why I lay out every pay period instead of combining into monthly sums.  It is easier for me to split out which expenses are deducted from which pay period.  As it happens, rent usually comes out of the first pay period of the month and all other fixed expenses are deducted from the second.

Budget: Fixed Expenses

Next comes my variable expenses and my disposable income.  I leave this for last as I can make adjustments easily given how my fixed expenses may impact my available cash, so I can muck around with these payments and keep an eye on my disposable income and how it increases/decreases.  I try to leave myself around $200 per pay period, sometimes it’s less, sometimes more.  I also have a column for notes.

Budget: Variable Expenses

Excel Formulas

Excel can get rather complicated but I use very simple SUM formulas in my budget.  You can learn how to do this here.



3 Responses to “Budgeting Methods – Which Is Best?”

  1. Dione (TakeADeepBreath) Says:

    I do excel too. I like all the control I have in excel. I get to see everything the way I like to see it. I even keep my online IDs and passwords for all my accounts in this document.

    I’ll try one of these online programs. I’ll make it my weekend project.

  2. pennyplastic Says:

    Dione, I do the same thing! So you can imagine how pissed I was when my flash drive ate my budget spreadsheet. I have tabs for budgets by year, my passwords, payments and eBay.

  3. Melissa (Athertonmerriweather) Says:

    Thank you for this! I think I’ll start with Excel. Like you, I’m obsessive and I think Excel is best for those tendencies. I’ve made this my weekend project.

    The hard part will be sticking to the budget :)

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