Successful budgeting requires three things; planning, discipline and tracking. Discipline is largely up to you to implement but planning and tracking is something that you can seek assistance with. Here are some of the best online budgeting tools that will cost you nothing to use.
Owned by Intuit, the company that brings you TurboTax and Quickbooks, Mint is a phenomenal free tool that gives you a 360 degree approach to budgeting. Allowing you to link your credit card, checking or saving account and even your investments, Mint constantly allows you to see in what categories your money is being spent, how it fares against your budgeting goals and how well you are doing on a yearly or monthly comparison basis. With alerts, access to a free credit score and even customized tips on how you can improve your budgeting based on actual performance, this is one tool that will give you an incentive to budget better.
They have even gone so far as to allow you to work towards a large one time purchase, like saving toward a down payment on a house or for a sum that will help you kick start a small business.
Since the process is completely automated and updated in real time, you will always have a snapshot of the health of your finances and your budgetary execution.
Security is top notch and Mint is available as very easy to use apps as well, always accessible from your phone.
If there was just one tool that you want to use to manage your budgeting, Mint would definitely be it, at least as of now!
Personal Capital is nowhere close to the 10+ Million plus user base that Mint can boast of, but it is a great budgeting tool nonetheless. Mint is a great choice if your budgeting solely relies on your salaried or business income. But, if a sizable portion of your personal income includes investment income, Personal Capital will be a better fit as it allows you to blend in those investment return cash flows while calculating your monthly cash flows.
Personal Capital is a great way to also stay on top of your portfolio, offering several features such a fee analyzer to detect those pesky investment fees that eat away at your returns, a net worth calculator, an investment checkup tool, a very detailed cash flow analyzer and even a fantastic retirement planner. Retirement planning is something that most Americans never pay attention to, until it is a bit too late!
Besides giving you access to these tools, the Personal Capital platform also gives you the ability to access portfolio management services. Currently, Capital Management manages over $3 Billion in assets and you can get started with them with a minimum $25,000 investment. Of course, investment management fees will apply should you choose them to manage your investment portfolio.
All in all, Personal Capital is the budgeting tool of choice for the already financially savvy, for those who are looking for cutting edge analysis that will not just help with short term budgeting but also tie those budgeting practices into long term goals like retirement planning, achieving net worth targets and more.
If you like good old Microsoft Excel and are OK with manually entering your income and expenses, there is nothing that can beat Microsoft Excel. Moreover, this is fantastic free tool that you can take advantage of if you don’t want Mint or Personal Capital always having access to all your financial accounts, for security reasons. While entering information manually might be tedious, Excel gives you super computing powers once you are done with the data entry, computing and analysis that can put template based budgeting tools to shame.
The internet is full of budgeting sheets created in excel, sheets that you can just download and use for your own needs. There are also tons of books on Amazon that show you how to harness the power of Excel to cater to your very specific budgeting needs.
Ditching online tools to adopt the cash only approach
At Money Looms, we once wrote a post on the 7 Day Money Looms cash only budget challenge. In that challenge, we urged users to avoid digital forms of payment for just 7 days and only use cash instead.
Believe us when we say that nothing will give you more incentive to closely follow your budget than a dwindling pile of cash. Online tracking of your budgeting gives you great details, but where it lacks is its inability in giving you the fear factor that you need when are close to running out of your funds or when you are ready to swipe your credit card to keep your lifestyle going.
When you have just cash to spend for the month, you will be very wary of unnecessary spending as you will otherwise just run out of cash to pay for even necessities. This approach will however require you to have discipline to use only cash, avoid credit and debit cards and also spend a decent amount of time planning your categorized expenses as you don’t want to be using cash for utilities when that cash should be used for groceries. You must categorize and inventory cash for specific spending categories to make this budgeting approach work.
Dave Ramsey, the famous personal financial blogger, invented cash only budget principle through his “Envelope System“, where you simply put cash in various envelopes such as “Groceries”, “Utilities”, “Gas” etc and only spend on those categories from those envelopes. When you ran out, you simply cut back on your lifestyle or plan better the next month!
Try the Money Looms 7 day cash only budget challenge or the Dave Ramsey envelope system for at least a month. It will give you a whole new perspective on your budgeting and will also be an eye opener in terms of helping you understand the value of money.