We all know budgeting is important—but did you know that choosing the right budget for you is equally, if not more important for your financial success? I will be discussing how to choose the right money management system for you and your financial needs.
Choose The Right Budget
Consider the following elements when you are making a budget and choosing the right budget for you.
Time Commitment
Decide the amount of time you are able to give, not the amount you want to give to the budget. I would like to give an hour each day devoted to my budget if I could, but with young kids and a job I am not able to. The budget I choose has to match the time I am able to give to it.
Level Of Effort
Be honest in acknowledging how much effort you are willing to spend on your budget. I am guilty of making really complicated plans and systems for how I want to manage my money, but end up abandoning after the first attempt because there is too much effort involved. Start with simple and add a level of complexity if you are feeling ambitious.
Choose The Right Budget: Consider A Hybrid Approach
Maybe you use your bank to categorize all your transactions, but use pen and paper when you track your shopping category since it is hard to stick to your budget in that category. This is the method I use. I find it most effective to digitally categorize, and track expenses for all of my transactions and then track food expenses using a pen and paper. I am able to stick to my food budget this way.
Trial And Error
Sometimes the best way to know if a budget method or system is right for you is to try it. In trying it out, you will know pretty quickly if the budget method or system is a good fit for you or not.
- Time Commitment- Be honest in acknowledging how much time you have, and how much time you are willing to spend on your budget
- Level of Effort- It is also important to decide the level of effort you are able to give to the budgeting method
- Consider A Hybrid Approach- Maybe you use your bank to categorize all your transactions, but use pen and paper when you track your shopping since it is hard to stick to your budget in that category
- Trial and Error- Sometimes the best way to know if a budget method is right for you is to try it. In trying it out, you will know pretty quickly if the budget method is a good fit or not
Personalize Your Budget
You need to make the budget applicable to you and your financial needs. To do this, consider your financial goal. If your goal is to spend less, use the cash envelope system. If it is to build your savings, pay yourself first. Or maybe you like different aspects of each budgeting method and system. You don’t have to stick to only one method or system. Feel free to mix and match or change your approach to fit your needs. As long as your short-term and long-term goals are being met, there is no reason why you can’t personalize your budget to better fit you and your needs. The last thing to consider when personalizing your budgeting method is your Spending Type. Your Spending Type will identify the habits and characteristics of your spending to help discover how to curb the urge to spend. Take the Spending Type Quiz now!
Choose The Right Budget Plan For You
Ultimately, the best budget method and budget system to choose is one you will use. In the beginning, err on the side of simple. You can always add more detail and complexity later on, but start out small. Recognize that you will never have a perfect budget—spending habits and temptations to spend can cause a budget to fail. As long as you are willing to make mistakes and adjustments along the way, you are well on your way toward financial success!
