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3 Options to Help You Manage Your Budget Better

Budgeting is one of the most important parts of personal finance yet it’s a known fact that few people can say they truly enjoy it. 
In the old days, budgeting required paper, a pen, a calculator, and a lot of time. Checking in on how you’re doing required a checkbook register and bank statement. Thanks to technology, things are much easier now. You can look at your spending by category in a couple of clicks! Here are three options you can use when budgeting to help keep things simple and easy.

Automated Budgeting

Mint.com launched in 2006 and led the first wave of online budgeting apps. Now joined by sites including You Need a Budget, Level Money, Mvelopes, and Wally, this industry offers a ton of budgeting features with a minimal time investment.
Apps like Mint and Personal Capital connect to your bank, credit, loan, and investment accounts so you can view all your financial information in one place. Some even look at your average spending by category to create a suggested budget that you can tinker with until you have it the way you want it.
Thanks to apps like this, budgeting is easier than it’s ever been! Each time you swipe your credit or debit card, these apps connect to your bank, categorize the transaction, and place them in your budget. Then you can see quickly how close you are to going over or if you have more room to spend before the end of the month.
This budgeting method is best for anyone living paycheck to paycheck or on a tight budget. Digging into the details helps you understand where your money is going so you can make the best decisions on where it should go in the future.

50/20/30 Budgeting

If you think detailed, line item budgeting sounds too tedious, even with automated budgeting apps, the 50/20/30 budget may be for you. Instead of using micro categories like groceries, gas, and rent, this method uses three high-level categories to manage your spending.
50/20/30 stands for 50% to needs, 20% to finances, and 30% to everything else. If you can keep your budget within those three categories, you can save a ton of time budgeting. This method of budgeting is not ideal for anyone with financial struggles. But if you have things generally under control, it is a great choice.
The 50% of your budget allocated to needs should include things like rent or mortgage, utilities, and groceries – needs you can’t live without. You might feel like you need the new iPhone, but I promise you can survive without it.
The 20% allocated to finances includes savings and investments. Your 401(k), IRA, emergency fund, and other savings and investments fall under this category. Recent analysis shows that most people should be saving at least 10%-15% in a retirement account to maintain the same quality of living in retirement. This category is not optional!
Finally, the 30% that makes up everything else. This is where your iPhone, Burberry scarf, concerts, bars, nightclubs, restaurants, and other discretionary spending lives in your budget. If you feel too constrained by this number, you need to learn to spend a little less or earn more to make up the difference. 30% going to anything you want should be plenty of fun money every month.

High-Level Budgeting

The last option for easy budgeting is best for someone who has their financial ducks in a row. If you never have to worry about money because you make enough or have enough, or just live a generally thrifty lifestyle, this could work for you.
A high-level budget consists of two categories. One is your needs and recurring bills. Things like your mortgage, utilities, life insurance, and other expenses that take place every month must be accounted for. Then, everything else falls into another lump category.
If you use this type of budgeting, you should already have savings, investments, and bills automated so you don’t have to worry about missing something important. If you want to use this budget method, also consider an app like Penny to keep track of your purchases. Even if you don’t need a detailed budget, it is important to review your transactions to ensure there isn’t any fraud or something you don’t recognize. Penny makes that simple.

Choose a Budget Method You Will Actually Use

If you have tried and failed at budgeting in the past, it’s time to try something new. The same budgeting method doesn’t work for everyone, but there is a method that will work for you.
Budgeting is all about understanding and controlling your expenses. It isn’t a restriction or something bad. Just like every other part of personal finance, it is a tool that you can use to put yourself in a better financial position than you are in today.
If you struggle with budgeting, give one of these a try. If it doesn’t work for you, try another app or move on to another budgeting method. If you do, you’ll be putting yourself on track to financial success. Your future self will thank you.
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