I’ve been budgeting for a long time, but only recently have I gotten a handle on my finances. I had swung from one extreme to the other. From being in a considerable amount of debt, juggling my credit card balances while taking out too many student loans, to living solely to service my debt. Now that I’ve struck a good balance, I’m in a much more comfortable place financially. But I’ve also had to make a lot of adjustments along the way. From apps to paper budgets, let me show you what I’ve used, what I’m using, and hopefully help you make your financial planning a little easier.
Budgeting Sites & Apps
I’ve used three different budgeting apps that I can remember, and they’ve all had their strengths and weaknesses. But what I’ve found is, that instead of tracking each individual transaction, something your bank does already if you use a credit or debit card, then a written budget is more accurate and flexible than budgeting apps. The apps I’ve used have all been somewhat unreliable. Let’s take a look at the ones I’ve used.
Mint
When I first got turned onto budgeting I was using Mint from Intuit. I liked the site because I could keep track of all my transactions, and my accounts were all linked to the app. It was easy to use as well, intuitive and free. But all I was doing was keeping track of how much money I owed. I was racking up a lot of credit card debt and student loans, and I wasn’t talking with my partner about our finances. We were more like roommates than we were lovers.
I liked Mint, but unfortunately toward the end of me using the app it was unable to sync or connect to my bank accounts. This was frustrating because I wanted an overview of all my account balances and transactions, so I could allocate them to the different categories in my budget.
Mint has since been bought by creditkarma, and I haven’t used their app since, so I’m not familiar with its functionality. But if it’s anything like the app I remember, than it may be worth looking into, and a quick look at their website suggests that it is. So if you’re looking for a way to track purchases and sync accounts, this may be a good option for you.
Every Dollar
After Mint I switched to Every Dollar by Dave Ramsey. A friend of mine turned me on to Dave and his method of paying down debt after I realized I accumulated $126K’s worth, and very quickly came to the conclusion that something needed to change. What’s so appealing about Dave’s method is, that he was in a situation similar to mine, only he owed considerably more money than I did. But he still dug himself out and I was determined to do the same.
His app is straight forward, easy to use, simple, free, and customizable when it comes to creating items for your budget. The one drawback is that you have to enter every transaction manually unless you pay for the upgrade to the pro version. With pro, you can connect your bank accounts and sync transactions the way you could in Mint’s early version. But entering the transactions manually isn’t so bad once you get used to tracking it at checkout every time you make a purchase. But you don’t have the overview of account balances on the free version. So I decided to look for a new budgeting app.
YNAB
I’ve recently begun using YNAB’s app and it doesn’t seem to flow as well as the others. The transactions are difficult to categorize, and it seems that the bank updates are glitchy. I spent 45 minutes looking for a transaction that I may have deleted, but no matter what I tried I couldn’t get the balance in my actual bank account to match the balance in the app. This may have been user error, but I think that the app could’ve been a more intuitive user experience.
There was also what seemed like an unnecessary step of approving each transaction. Unnecessary because the app was supposed to be syncing my transactions. Another reason I suspect that my balances weren’t matching up. So the needlessly complicated layout and functions made YNAB’s app difficult to use.
Pen & Paper
I’ve been using a written budget since I took up the reigns of my finances. I like having an overview of where my money is going from month to month, but also the ability to track my budget item and goals in my own way. Having a physical connection to my budget and a creative outlet is important to me. The act of writing it down and having something that is visually appealing to me is gratifying also. And I feel as though I have more control over and connection with my money than if I were to just plug numbers into an app. Let’s take a look at the different parts of my written budget.
Budget Breakdown
Above is my May, 2024 budget. There are six sections that I track; income, expenses, debt, funds, totals and notes. My budget has evolved since its inception, and this is its current iteration, so let’s take a look at the different parts of my budget and I’ll explain how each one works.
Income
This is the section where I keep track of what my estimated monthly income will look like. Some is predictable. For example I know how much my salary will be from week to week, so I can count on that income being consistent. But this section also includes an “other” line for unplanned windfalls.
For example, say my neighbor needs me to housesit for her, and she pays me $100, I can track that income in my “other” category. It’s good to have an “other” line for each section, so you can be flexible when you need to make a purchase that doesn’t fall in your E-fund category and plan for the unexpected.
Monthly Expenses
This section of my budget is where I track my reoccurring expenses. Examples are items like groceries and eating out. I know I need to eat each month, so I set aside money for groceries and takeout. Then I can adjust my spending from month to month until I find a number I’m comfortable with spending and how much food I’ll actually need. One where I’m not going overboard, but also not depriving myself of the foods I enjoy.
Debt Tracking
In this section I keep tabs on the money I owe. While I was $126K in debt, I used Ramsey’s snowball method to pay off my credit cards and loans. The way it works is, say you have four credit cards that you owe $2k, $3k, $4k and $5k on, with a minimum payment of $50 for each card. Let’s also say that you have $400 total that you can pay towards your debt each month, including the minimum payments with that $400. With the snowball method, you pay the minimum payments on all the cards first, $50 times four cards equals $200. You then put the remaining $200 towards the card with the lowest balance each month, along with the $50 minimum payment. So in this case you’ll be paying $250 a month to the card with the $2k balance, until you pay it off. This should take you eight months. $2k divided by $250 equals eight months.
You then take the $250 you used to pay off the card with the $2k balance, and add it to the $50 minimum payment of the next card you’re going to pay off, the one with the next lowest balance. In this case it’s the card with the $3k balance. Now you have $300 to pay towards that card, minus the eight, $50 monthly minimum payments you were making, while you were paying off the card with the $2k balance. This brings the card you’re currently paying, the one with the $3k balance, down to $2,600. Paying $300 dollars a month, it should take you about nine months to pay off the $2,600 balance. You will then have paid off the two cards with the lowest balances, and then you repeat the process with the remaining two cards. It’s easier than it sounds.
Sinking & E-Funds
Sinking Funds – Short term savings, or sinking funds, are a reserve of cash I keep on hand for the items I know I’ll need at some point, but don’t occur the way a monthly bill that has a fixed amount does. For example clothing is something I know I’ll need, but I don’t go clothes shopping every month. So like a credit card, I draw from my clothing fund when I need to buy clothes, and I pay myself back with the money that I set aside each month in my budget. I also cap that fund at a reasonable amount so I don’t have loads of money hanging around in my account. For example, I’ll put $50 into my clothing fund each month until I reach my cap at $200. If I spend $60 in July, I know I’ll need to pay myself $50 in August, and the remaining $10 in September. This way I’ll have the money for the things I know I’ll need eventually, without having to dip into my other planned-for budgeted items.
E-Fund – Aka an emergency fund, is where I save for emergencies. For example, I broke my key off in my lock a week ago and it cost me about $400 dollars to replace. This is money I did not plan for, so I needed a cash reserve that I could pull from, that wouldn’t effect my other monthly essentials such as rent and food. And like a sinking fund, I pay myself back for whatever I borrow.
One of the main reason for having an E-Fund is if you become unemployed. I plan on capping mine at $20K, because you only have to stumble into $126K worth of debt once to never want to go into debt again. Where you decide to cap your emergency fund depends on your life style, expenses and goals. Dave Ramsey suggests, a good place to start is six months worth of expenses, and common wisdom is about three months. Again, find what you’re comfortable with and start there. It’s purpose is for security, so do what makes you feel secure. But don’t plan from a fearful place because then you’ll make impulsive decisions.
Totals
Here is where I track my totals. You don’t really need this part in your budget since there’s a totals line at the end of each section. But I like it because it allows me to see the totals in one place, and I’m a big picture person. This way I can see the percentage of each category, and adjust them as my budget evolves.
Notes
And finally, I have a notes section that I use to jot down anything I need to remind myself of for future budgets. Or to track what’s working and what isn’t. This way I’m not wondering or guessing why something didn’t work last month, or forget why I made an adjustment. Basically I don’t want to miss something important.
What I’m Using Now
I’ve settled on pen and paper and using my online bank statements to keep track of individual purchases and categories. It’s convenient to have all of my accounts’ balances listed in one place and to categorize and split each transaction, but when I’m categorizing my transactions from my bank account, I’m not too worried if I’m off by $20 in a category.
When it comes to your budget, ultimately do what you’re most comfortable with and what works for you. If you’ve come from a family like mine, where nobody spoke about emotions, sex or money, talking about the subject can be like opening an old wound infected with contempt and unresolved arguments. This makes learning to budget a challenge. To this day I have no idea what my family’s finances look like. When I asked they told me they weren’t comfortable sharing that information. If you can’t trust your family, than who can you trust? Apparently, strangers on the internet because there are loads of people out their that were in the same boat, like Dave Ramsey, and are now sharing their information and want to help.
So friends, if you’re in need of some direction on where to go with your finances, a written budget is a good place to start. Whichever budget method you choose, come to your budget from a place of taking care of yourself first, not from a fearful place. This way you’ll know that you’ll be ready for whatever comes next. And if you like my budget layout, look into Bullet Journaling. There are loads of creative ways to get a handle on your finances, and all sorts of other domestic areas as well with artistic expression. Peace, & thanks for reading 🏔️🌙🌧️🕯️💜💙💚
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