Managing your finances can be daunting in today’s fast-paced world. From monitoring your expenses to budgeting for future goals, it can feel overwhelming to keep track of it all. Luckily, technology can make our lives easier in a digital era – and budgeting is no exception.
Online budgeting tools have revolutionized how we manage our money, providing us the convenience and flexibility to stay on top of our financial well-being. We will explore seven online budgeting tools you can use today to take control of your finances.
Getting Started with a Budgeting Plan in 10 Steps
Starting a budgeting plan is crucial for managing your finances effectively. Here are some essential steps to get you started:
Assess Your Financial Goals
Before you can really get started on your budgeting journey, you need to set some financial goals. Here are some examples of different goals.
Short-Term: E.g., paying off a small debt, saving for a holiday, saving for a new car.
Long-Term: E.g., saving for a house, planning for retirement, paying off student loans.
Determine Your Income
List all sources of monthly net income (take home after taxes), including salaries, bonuses, rental income, dividends, etc.
Gather bank statements, pay stubs, bills, and other financial documents to clearly understand your income and expenses so you can account for every dollar spent monthly.
List Out Monthly Expenses
Fixed Expenses: Costs that don’t change from month to month, such as rent/mortgage, loan payments, and insurance.
Variable Expenses: Costs that fluctuate, like groceries, dining out, entertainment, and utilities.
Don’t forget about occasional expenses like yearly memberships or quarterly bills.
Categorize and Allocate Funds
Categorize expenses (e.g., housing, transportation, food, entertainment) and allocate a portion of your income to each category.
Set Spending Limits
It is important to set realistic limits for each category based on your past spending and financial goals, which is why you need to know how much money you have coming in and going out before you can set spending limits.
Choose a Budgeting Method
Here are some of the most common budgeting methods:
Zero-Based Budget: Assign every dollar a job until you have $0 left.
50/30/20 Rule: Allocate 50% of income to needs, 30% to wants, and 20% to savings and debt repayment.
Envelope System: Allocate cash for variable expenses in envelopes; when the cash is gone, there is no more spending in that category for the month.
There are many other methods; find one that fits your needs.
Record and Track Spending:
Use apps, software, spreadsheets, or a simple notebook to track every expense.
Regularly check in on your spending compared to your set limits.
Adjust as Necessary
Life is unpredictable. Your budget should be flexible. If you consistently overspend in a category, re-evaluate and adjust accordingly.
Set aside time monthly or weekly to review your budget, assess your spending, and adjust for upcoming expenses. Use this time to address any financial challenges and celebrate successes.
Save for Emergencies
Aim to build an emergency fund. Even a small amount set aside each month can make a significant difference in unexpected situations. Unfortunately, the reality is that there will be some unexpected expenses in your life, like medical bills, veterinarian bills, car maintenance, home appliances breaking, etc., that you want to have a nest egg to fall back on when you need it.
If you have debts, incorporate debt repayment into your budgeting plan. Focus on high-interest debts first, or consider the snowball method, where you pay off smaller debts first for motivational wins.
Starting a budgeting plan requires commitment and consistency. Over time, as you adapt and refine your budget, it will become an invaluable tool to help you achieve financial stability and meet your goals.
Top Online Budgeting Tools
Below are the top online budgeting tools to consider using today to get a handle on your financial future.
Mint is one of the most popular and widely used budgeting tools available. Mint has a user-friendly interface and powerful features, Mint allows you to create budgets, track your expenses, and monitor your savings.
Mint links your bank accounts, bills and credit cards, making it easy to stay organized and get a holistic view of your financial situation. It is very user-friendly and easy to move expenses into the correct category to understand where you spend your money clearly.
Mint also provides personalized recommendations and tips to help you save money, understand your spending habits and achieve your financial goals.
YNAB focuses on creating a proactive budgeting experience. By giving every dollar a job, YNAB helps you allocate your income to different categories and prioritize your spending. Its “Rule 4” philosophy encourages you only to spend the money you have, avoiding the trap of living paycheck to paycheck.
They also offer educational resources and workshops to help you develop good money habits and conquer debt. They offer tools to help you allocate funds for holiday shopping, car or medical expenses, and other unexpected expenses that are unfortunately a part of life but difficult to plan for.
Empower, formerly named Personal Capital, is designed for those who want to take a comprehensive financial approach. In addition to budgeting and expense tracking, Empower offers powerful investment tools and retirement planning features.
It lets you link your investment accounts, real estate properties, and other assets to get a complete picture of your net worth. With its wealth management services, Empower is a great choice for individuals looking to grow their wealth and plan for the future. It is also a common company employees use for benefits, which is a bonus if you are looking to budget using their services.
EveryDollar, developed by personal finance expert Dave Ramsey, is a straightforward budgeting tool focused on helping you achieve financial peace. With EveryDollar, you can create a monthly budget and track your expenses by assigning them to different categories.
It also provides a debt snowball feature, which helps you prioritize paying off your debts systematically. EveryDollar offers a free version and a premium version with additional features.
If you’re looking for a budgeting tool that offers a clear overview of your finances in an easily digestible way, PocketGuard is the perfect choice.
By linking your bank accounts and credit cards, PocketGuard automatically categorizes your transactions and shows you how much money you have left to spend after accounting for bills, savings, and goals. They also offer personalized insights and financial tips to help you optimize your spending and save more. It boasts getting your account up and running within 15 minutes!
Goodbudget takes a unique envelope-based approach to budgeting, digitizing the traditional envelope system. With Goodbudget, you assign money to different virtual envelopes based on your spending categories.
This visual representation helps you stay on track and prevents overspending in any particular category. Goodbudget allows you to sync your budget with a partner or family member, making it ideal for collaborative budgeting. They also have a free and premium plan, depending on your needs and what features you are interested in using.
If you’re looking for a budgeting tool specifically designed for couples, Honeydue is worth checking out. Whether you want to manage your joint expenses or simply keep each other accountable, Honeydue makes it easy to track your shared finances.
From bill reminders to expense tracking, it provides a streamlined interface for couples to manage their money together effectively. Honeydue also allows you to have individual accounts while still having an overview of your overall financial picture as a couple.
Budgeting is a crucial aspect of personal finance, and online budgeting tools can make it easier and more convenient than ever before. With the range of options available, you can find a tool that suits your needs and helps you achieve your financial goals. So, why wait? Start using these online budgeting tools today and take control of your financial future.
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