A lot of people believe that budgets just don’t work. I personally believe that budgets have their part in financial plans and that anyone who is concerned with their financial future should know exactly where their money is coming from and where it is going.
What are some ways to track your income/spending? As most of you are computer savvy (since you are reading this blog), there are 3 mainstream programs that financial geeks use:
- Excel or any spreadsheet program
- Microsoft Money
This is a great way to start your budget and get a clearer picture of where your money is going. Simply create two columns, monthly expenses and monthly income. This is a quick and dirty way to figure out if you’re living within your means and a detailed picture of where you can cut expenses if need be.
A very popular program for Canadians. What I like about Quicken is that it accounts for Canadian tax law and displays your net worth as soon as you open the program.
This is the program that I personally use. The reason why I use this over the others is because I can update my portfolio holdings over the web, and it automatically adjusts within the Microsoft Money program. This is helpful if I make a few trades away from my home computer and I want to update my portfolio tracking software. Even though I have the Microsoft Money Canadian edition, it just doesn’t seem as Canadian friendly as Quicken. If Quicken had a better portfolio feature, I would seriously consider switching to Quicken.
A feature that I really like about MS Money is the cash flow estimator which is great when you want to keep a minimum balance in your bank account. You can put in scenarios of “if I spend X on X date” what would my bank account look like 3 months from now?
Once you enter all of your bills and income sources into MS Money, you can create a budget separated by categories. If you enter an expense that is greater than your allocated budget for that category, you’ll get a nice popup window that tells you that you’re spending too much. I have a separate category for my wifes misc spending that I keep a close eye on .. shhh. ;)
What do you guys use to track your expenses?If you would like to read more articles like this, you can sign up for my free weekly money tips newsletter below (we will never spam you).