This is the next installment in a series of articles about making
budgeting a way of life. It's not the torture mechanism we've been trained
to think it is, but rather a powerful method of gaining control, planning,
communicating, and fulfilling your dreams.
At the very least, a budget should allow you to find extra spending
money in your paycheck every month! In the last installment, I discussed
the pros and cons of older budgeting systems, and the general features of
the budget of the future.
This time I'll specifically itemize the key features of a good budgeting
system; one that will grow with you, frustrate you the least, and keep you
in control of your money!
1. The system should be fairly easy to run:
If it's too complicated, you'll give up on it quickly and end up with no
system at all. Many budgeting systems require you to fill out dozens and
dozens of forms, and/or keep meticulous records of every penny you spend.
It doesn't have to be that complicated!
2. Your budgeting system should be able to be
used as a communication tool with the other members of your household:
Effective money management within a marriage or family is based on good
communication. Your budgeting practices must support and facilitate the
communication process.
3. Your budget should allow you to define your
goals up front, and then act as an instrument panel to guide you to
success: Beware of budgets that act like "rear-view mirrors", that only
tell you what has happened to your money in the past. You want a proactive
system that gives you the power of planning and control.
4. If you have a spouse, it should be very easy
for either of you to understand and run the budget at any time: Even
if one person is the "primary" bill-payer, there will be times when the
significant other will have to run things. The hand-off should be
effortless.
5. Your budget should be customizable: Our
relationships with money are as individual as all of us are. Your budget
should be a reflection of you and your needs, dreams, and goals.
6. There should be an element of fun to the
budget: Fun or rewards built into your budget will keep it interesting
and help keep you committed to it. Examples of fun elements are saving for
a treat or vacation, or getting "refunds" of spending money back when you
pay a check.
7. The budget should be based on organization,
not penny-pinching: Too often, people fall into the trap of thinking
that the only way to get ahead is to give up things. Organization is much
more effective, and a necessary first step before you can judiciously decide
what to give up, or before you can decide if you even need to make any
sacrifices.
8. The system should easily and instantly let
you know how much spending money you have: Between bills, regular payments,
savings and investments, taxes, and all the other routine and not-so-routine
assaults on your checkbook, it must be an easy matter to know exactly how
much discretionary spending money you have at any time. This knowledge lets
you take advantage of opportunities, react to emergencies, or perhaps just
enjoy a comfortable evening out.
9. Your budgeting system should continually
teach you what's going on rather than just blindly giving some "rules" to
follow: The goal of any good budgeting system should be to impart
understanding. Knowledge is power.
Next time: 3 Myths of Budgeting; The Misunderstood Miracle
About the Author: Jane Chidester is the author
of "BudgetYes! 21st Century Solutions for Taking Control of Your Money Now!"
She conducts seminars and is a published columnist on personal budgeting
topics. Visit her Web site: "Budget Central" at
http://www.TulipTreePress.com,
a personal budgeting information and resources repository of information
and resources on personal budgeting, financial planning, and household money
management-a complete budgeting education. You can write Jane at
Jane@TulipTreePress.com. |
