Now that you know why you need a budget and what your budget should include, it’s time to start thinking about where and how you’ll create your budget. You may have started by laying out your income, expenses, and goals in an excel worksheet or as a list on paper. But you’re busy. You want your budget to work while you sleep or feed the kids or drive to the grocery store. You need a budgeting program!
There are many budgeting programs available (at many different price points). They all promise different things. So, how do you know what you need? How do you know what you want?
Here are a few different budgeting programs that I’ve used over the years. I list what I liked and didn’t like about each one. Which ones have you tried?
Pen and Paper (and a calculator)
- The pen and paper method is simple to use. It’s a matter of writing down your transactions and adding them up with a calculator.
- There are so many cute printable worksheets available on Pinterest. I especially love Frugal Fanatic’s 2016 Budget Binder. It’s pretty, well-organized, and has everything you need to get off on the right foot with your budget.
- While the pen and paper method is simple and straightforward, it can be tedious. It’s up to you to write everything, manually add the transaction totals and the category totals, and review it.
- It’s also easy to make mistakes using paper, and it’s not so easy to find your mistakes. If you transpose a number or forget to add a transaction, it can easily throw your entire budget off.
- With the pen and paper budgeting method, there’s no easy way to run reports. You may categorize your transactions into housing, utilities, transportation, etc., but there’s no way to easily see how different activities would affect your budget.
- Bottom line: The pen and paper method of tracking your expenses is very labor intensive. It’s a great way to lay out your budget and get an idea of what you want to spend, but it’s easier to use budgeting programs or software to calculate your budget.
Excel Spreadsheets
- With Excel, there’s a manual and automatic component to creating your budget. You will need to manually enter and categorize your transactions, but you can add formulas to automatically add your transactions and categories.
- Some transactions may be downloadable from your financial institution. Unfortunately, you may need to categorize the transactions and format them to fit in your budget worksheet.
- Excel isn’t the most user-friendly program. It has a lot of functions, but it can be overwhelming trying to learn them. Yes, you can create your own reports by filtering columns or creating pivot tables, but unless you have advanced Excel skills, you may find yourself only using basic functions like “sum” to add up your total transactions for the month.
- It’s not a pretty interface. Most Excel spreadsheets are just that, a boring spreadsheet. It’ll get the job done, but it can be complicated if you want to run reports or search for certain transactions.
- If you’re tech savvy, you can create reports for your transactions through filters and pivot tables.
- Bottom line: I used Excel in the past to create a basic budget and track expenses. It was easier to use than paper because I could easily add my transactions and search, but it was still very time-consuming to enter and categorize transactions from my financial institutions. If you’re just looking for a basic method to lay out your budget, try Excel.
You Need a Budget (YNAB)
- YNAB is perfect for beginner budgeters. It offers several different training programs to set up your budget, teach you how to use it, and answer any questions you may have. Also, the trainers give away a free copy of YNAB at the end of each training course!
- It’s easy to link your bank accounts to YNAB and automatically transfer all your transactions into the program. The program recommends starting fresh, though, so they don’t advise transferring your account’s history.
- The ultimate goal of YNAB is to help you create a buffer and “age your money.” The program helps you see how long your money has been in your account, and the objective is to always work a month ahead. For example, in February, you should be spending your income from January so that you always have a cushion.
- YNAB syncs to a cloud, so you’re able to use it across all platforms. Even when you’re on the go, you can check the app on your phone or tablet and determine exactly how much you have to spend.
- YNAB doesn’t currently offer reporting, although their website claims that they will update the software with this functionality.
- In addition to the courses, YNAB offers technical support through email. If you complete a “contact us” form, they will respond to your email within 48 hours.
- YNAB is free for the first 34 days. Sign up, take the courses, and try it out. If it doesn’t work for you, stop using it (you don’t need to provide any form of payment for the trial). After the trial, you may purchase YNAB for $60 (for a lifetime access to a previous version) or $5 a month for the newest version (or $50 annually for the newest version).
- Bottom line: I love YNAB. It has a user-friendly interface, it’s simple to set up, and they offer courses and have a ton of information on their website to help you with your financial needs. I’m disappointed that they don’t offer reporting, though, and I look forward to having that functionality. (I’ll update this review once they begin offering reporting functions.)
Quicken Deluxe for Windows (2013)
- I’ve been using Quicken Deluxe for Windows since 2013. I loved it. It had a straightforward budgeting program, I could easily run reports to give to my tax preparer, and I always knew exactly how much I could spend months in advance. Unfortunately, my computer is dying a slow and painful death, so I need to update to a new version.
- Quicken Deluxe for Windows was easy to use. It offered a syncing function so that you would be able to access it from an app, but the app didn’t offer the same functionality as the desktop version. For example, I was never able to view my budget, but I could see how much I had in my accounts at any given time.
- The budget functionality in Quicken for Windows made it easy to establish long-term goals. I was able to create a budget for the entire year, and I could even run scenarios (how much would I need to save for retirement, how long would it take to pay off my mortgage, etc.).
- Quicken imported your transactions from your financial institution and would list the previous month’s spending in each category as you created a new budget. This made it easy to create your budget based on your current expenses.
- Quicken offers telephone support for assistance with the software.
- You can purchase Quicken on Amazon, often for a cheaper price than Intuit, the software developer, sells it.
- Bottom line: I would recommend an older version of Quicken if you’re able to obtain one. The newer versions don’t have good reviews and the developers seem to have removed some of the functionality that I used and loved.
Quicken for Mac (2016)
- While Quicken for Mac 2016 is easy to set up, I had difficulty transferring my transactions and budget from my previous version of Quicken. I finally gave up and started from scratch, which was fairly easy.
- The transactions from your financial institutions can be automatically downloaded into Quicken for Mac.
- When you begin to create your budget, Quicken will automatically list the previous month’s expenses for each category. You can then use that to help create a budget for the following month based on your current expenses.
- I purchased Quicken for Mac for $45 through Amazon.
- Bottom line: I do not recommend Quicken for Mac. Apparently, you could create a budget for the entire year with Quicken for Mac 2007, but they changed that functionality.
Creating your budget doesn’t have to be complicated. You should be able to easily lay it out using one of the budgeting programs mentioned above and have it start working for you! The ultimate goal is to reach your financial goals (without worrying about what your budgeting program is doing)!
Which budgeting programs do you use? Do you like the ease of paper and pencil or Excel spreadsheets? Or do you prefer to use software like YNAB or Quicken?