I’m sure you would agree it is a good idea to budget your finances to save for a rainy day or emergencies.  Society preys upon “impulse shoppers”, which no wonder so many people are in debt.  A budget will help you keep more of your money, and most importantly, know where your money is going.

To figure out just how badly you may need to set up a budget, take a look at your bank account history over the last couple of months.  If you notice a lot of purchases for items that you don’t really need, then budgeting is a good idea to get on track.

Luckily, there are a slew of budgeting software options (many which are free), which can help you get started.  One of the most popular is Mint.com, which is owned by Intuit (the makers of Quicken).  I have used Mint, and I think it’s a good option.  If you choose to start with a budgeting software, the first thing to do is to gather all of your bank account information and bills.  This will include login information on the variety of bank websites you normally log into to access your banking information.  Budgeting software will be your central hub for all of your financial details, including your bank accounts, bills, and outstanding loans.  The advantage of budgeting software like Mint is you can clearly see (in category or chart format) what you’re spending your money on.  Mint will even offer you third party services if, based on your numbers, they can offer you a better interest rate or more services for your money.

Just like any service, if you choose to shop around for the right software, always check out the reviews online to help you make an informed decision.

Although I suggest budgeting software, you don’t necessarily have to use these.  You could also set up a budget manually, and there are a variety of ways to do this.  With either option, it takes a lot of discipline to stick to the budget.  Ultimately, it boils down to you making the right adjustments in order to really see a change.  But either way, I think the most important idea is to know WHERE YOUR MONEY IS ACTUALLY GOING.  Once you realize how much you spend on certain items, you can begin to spend less on that item, and over time, save money.

I’m a fan of the “out of sight, out of mind” concept.  This means you basically stash some money each day, week, or month away from yourself, so that you know where it is, but you really never see it.  Once you add on to the stash, you don’t really look to access it since it’s not in your wallet, purse, or bank account (sometimes having money in a savings account, for example, can be tempting to withdraw from).

What are some tactics you use to budget your finances?  Is it working?  Do you want to do better with your budgeting?  Are you starting now?  Leave a comment!