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Better Budgeting
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The following features are ones to look
for when selecting a budgeting method. If you're looking to upgrade an existing system,
assess your current practices, or even design a system of your own from scratch, the
following ideas will give you a head start in your evaluation and selection process.
 | 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!
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| Your budgeting system
should be able to be used as a communication tool
Effective money management within a marriage or family is based on
good communication. Your budgeting practices must support and facilitate the communication
process.
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| If you
are a couple, it should be very easy for
either of you to run the budget at any time
Even if one person is the "primary" bill-payer, there will
be times when the other will have to run things. The hand-off should be
effortless.
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| 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.
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| 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.
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| 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.
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| 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.
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| 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.
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| Your budgeting system
should continually show 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.
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Next:
Traditional (old) Budgeting
Models
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