For many, the New Year arrived with a resolution to finally start keeping a budget. And why not? Creating a budget — and sticking to it — are key first steps toward reaching financial goals large and small. Unfortunately, it’s easy to get overwhelmed by the complexity of creating and keeping a detailed budget, not to mention the time required. Before you’ve finished calculating your income, resolve has faded, and your budget remains a good idea you’ll get to someday.
The good news is that a budget doesn’t have to be complicated, and there are plenty of free tools and resources to help you get started and keep going.
1. A Simple Notebook
We’ve discussed a spending notebook previously, and whatever budgeting tool you ultimately use, the notebook method or another way to easily and reliably track your expenses should be your first move. You can’t fill out a new budget with a bunch of guesses, after all. After a month of tracking all your expenses (all of them!), you’ll have a clear picture of where your money’s going, and you’ll have most of the key details to plug into your “official” budget.
2. Envelopes
This is Dave Ramsey’s preferred method of household budgeting. Once you’ve figured out your budget categories and target amounts with your spending notebook, you label a bunch of envelopes and fill them with the appropriate amount of cash. The benefit here is that you aren’t using credit (which Ramsey argues against), and by spending cash, you’re much closer to your money — you literally feel it slipping through your fingers with every purchase. Note that you don’t need an envelope for every expense category — just those that tend to get away from you, such as food or entertainment.
3. An Excel Spreadsheet
This is free if you already have Microsoft Excel installed on your computer. Microsoft provides several simple budget templates, and if you’re familiar with Excel, they’re easy to use. For a truly free alternative, try a budget template for Google Sheets. This option is for those who don’t mind wrangling spreadsheets and entering data manually. Maintaining a spreadsheet budget does require more time than some of the other options here, but many experts believe the extra effort helps you have a better understanding of your money, which makes it easier to develop better habits.
4. Mint
Mint may be the most well-known of the Internet- and smartphone-based budgeting applications — and for good reason. Once you’ve entered basic information such as banking, credit and investment accounts, Mint begins automatically tracking your money. The default categories are sufficient for most people, and you can add your own. The built-in goal-setting tools are robust and easy to use, and since it’s owned by Intuit, your data feeds right into TurboTax at tax time.
5. Pear Budget
Pear Budget began as a cool Excel spreadsheet (which is still available for free), and has now become a Web app. Setup is simple, with a few dozen common expense categories to choose from, and it’s all easy to change later if you need to. You won’t find many of Mint’s automated bells and whistles here — income and expenses are entered manually — but you do get some goal-setting and planning tools. Note that after a 30-day trial, Pear Budget costs $4.95 a month.
6. Level Money
Level Money is like the envelope system stuffed into a smartphone. After you set up some spending and savings goals, the app lets you know what you can spend each month, week and day. A quick glance at your screen (after ringing up your morning latte perhaps) shows how much you have left to spend to stay on track. Level Money connects to your bank accounts and estimates your income and spending habits automatically. It also adjusts your spendable cash based on goals you set.
7. GnuCash
GnuCash earns a mention here because it’s free and because it’s available on the Linux operating system as well as Windows and OSX. Because it is based on double-entry bookkeeping, it is suitable for both home and small business use. You can use it to track income and spending, as well as bank, investment and retirement accounts. Users can input account details manually or download and import OFX files provided by most banks. This is a serious accounting tool, but it’s simple enough for most home users willing to give it a try.
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7 Simple and Free Budgeting Tools originally appeared on usnews.com
