One of the first things that we can do to help ourselves get out of debt and live the life we’ve always wanted is to develop great money habits. One of those great habits revolves around the “B” word–BUDGET. However, budgeting, to me, is one of the hardest habits to master. The good news is that we live in a society that has created personal budget planning software to make our lives, and by extension budgeting, easier. I will list a couple of tools that I’m using to help me in my quest to develop a healthy budgeting habit.
First: Why do we need to budget?
If you are driving to your friend’s place for the first time, are you going to just drive there, or are you going to ask for your friend’s address and put it into Google Maps? Chances are, you going to do the latter. Even if you aren’t tech-savvy, if you are trying to get somewhere that you’ve never been before, you will need a road map.
That’s what budgeting is. It’s like a road map.
According to ConsumerCredit.com, a budget is your guide to show you if you are heading into the right direction for your financial goals. It’s a flashlight into the dark recesses of your spending habits. Of course, when you start shining a light into your spending habits, you might not like what you find.
And, that’s okay (for now)!
One of the first steps to waking up from our American Nightmare is to be honest about where we are in our financial habits. It’s just like an alcoholic going to an AA meeting… the first step is to recognize and admit that they have a problem. Using a budget help you to realize that you have a problem so that you can work to FIX the problem.
During my personal quest to find the best personal budget planning software, I realized that sometimes it’s okay to use multiple tools. Some tools can pick up the slack where other tools fall. The three tools listed below are tools that I currently use at the same time. It’s up to you if you want to use all three or just one. However, I will tell you why I use the tool and explain how it’s helping me.
Mint keeps you & your checks in check
I remember that a friend of mine recommended Mint to me almost 10 years ago, and I still use it today. It’s a very handy tool for help you monitor your finances and develop a budget. So, what is Mint you ask?
Budgeting Tool Review: Mint
Mint is a free finance management website and app by Intuit–the same people who created Quickbooks and Turbo Tax. What I like about Mint, other than the price, is that it connects to a vast majority of banking institutions, PayPal, credit card companies, student loan companies, and even some utilities like Verizon.
What’s really powerful about Mint is that when you connect your bank account to Mint, majority of the purchases you make are automatically categorized for you. I use that feature to analyze my spending habits to create a budget. I try to make it a personal goal to reduce my spending in certain categories.
My Personal Shame
May I be a little transparent with you? When I began tracking my expenses with Mint, I discovered that over the course of a month, I spent over $300 on eating out. Yes! In a month…. I agree, that’s ridiculous. And I wondered why I didn’t have enough to pay some bills.
Since I’ve started using Mint seriously, I’ve been working on drastically reducing it. I’ve limited the amount of times I go out to eat and the number of meals that I eat per day (saving money and loosing weight). I also plan to do more grocery shopping to try to curtail that spending in that category.
While Mint is excellent for tracking expenses, which is very important for budgeting, it doesn’t have other good financial habit features. One of those features include automatically saving money. Another is photographing and assigning receipts. I found 2 other tools for that. Just keep reading.
Digit is legit to help with budgeting
Using a budget is one tool to help me wake up from my American Nightmare. While this post is discussing some personal budget planning software to make your life easier, I would be remiss if I ignored a very important financial habit that should be used concurrently with establishing a budget. That habit is building an emergency fund. This is a budgeting item that is crucial to our development of good financial habits.
I’ve heard many financial experts say that a person is supposed to have enough money in an easily accessible and secure account that will be good enough to last for about 6 months. So very true and it’s a lesson I’ve learned the hard way.
My Personal Bloody Mess
One year, I had a 90% reduction in my income because I quit a job with no backup job in place. I was young and stupid at the time. It was about 6 months before I found my next paying job. In the meantime, I was relying on my credit cards to help me keep my rent and pay other utilities. That was a BIG no-no and as I’ve recently learned, a bloody mess.
Now, I’m still paying for the mistake I made years ago. If I had an emergency fund in place, I could’ve avoided all of that. I hope my transparency has help you understand why saving money is crucial.
While it can be very off-putting (and almost impossible) to save 6 months worth of expenses while you’re in debt, there is an easier solution. BEGIN your emergency fund.
Starting an Emergency Fund
I’ve heard two different amounts from two different financial experts as to what is considered the appropriate amount. In the book Total Money Makeover, Dave Ramsey recommends saving $1,000 if you’re single and $2,000 if you’re married. Brian Beane of the Extra Digit Movement recommends saving at least $3,000.
I say that we need AT LEAST $1,000 in our savings for an emergency to start off. Then begin tackling your debt while trying to put away small amounts of money to build up the emergency fund to last you for 6 months. As debt is paid off, use the snowball method to pay extra on your debt.
I said all of that to make the case for one tool that I’ve fallen in love with: Digit. What is Digit?
Budgeting Tool Review: Digit
In a nutshell, Digit saves money for you. You can connect your account to Digit and you can choose how much and how often you want Digit to save money. The money is as accessible as getting money from your local bank. Also, it chooses how much to save based off of your spending. Finally, the BEST part about Digit is that it will not pull money from your account when you don’t have any money.
I’ll be upfront with you, Digit is not free. The first trial month is free, but the service does have a cost. However, the cost is a measly $2.99/mo and you can cancel it at any time. I tried it for a month and I haven’t missed the $2.99 since then (that was about 2 months ago).
I recommend using Digit to help you build an emergency fund without thinking about it. You can try it for yourself for free for 30 days here. It’s an affiliate link, so if you click on it and purchase Digit, I will be compensated for referring you.
Cashflow Manager is simple and effective
The first two tools are pretty solid tools that have helped me so far in my quest to develop a budgeting habit. However, they have some shortfalls.
Budgeting Software Pitfalls
Mint is a great free tool to help you track, categorize, and analyze your expenses. But, you can’t take pictures of your receipts. Also, there’s a delay with tracking your finances. What do I mean by “delay?”
Mint refreshes itself daily, but you might experience maybe a 24-hour delay as to what’s in your bank account and what you actually have on hand. That delay can cause problems, especially if you need to know how much you currently have in your account in real time.
Digit is awesome as well. Digit sends you daily text messages of your bank account balance. The downside? The texts can also be as delayed as the information you get from Mint. Plus, Digit only saves money towards your goals. It’s not exactly personal budget planning software.
While it’s good to have things automated in this busy world we live in, sometime the old school can help drive home good habits: That’s where the Cashflow Manager comes into play. What’s the Cashflow Manager?
Budgeting Tool Review: Cashflow Manager
The Cashflow Manger is software developed by myEcon, the personal financial success company. It’s a tool used by small businesses, entrepreneurs, and millions of home users. What the Cashflow Managers offers is the ability to securely track your finances as they come.
I use it to develop a budget based off of the information from Mint, record and categorize my expenses, take pictures of receipts and associate them with expenses, set up reoccurring expenses, and print out a profit and loss statement to compare how much I’ve earned to how much I’ve spent. The later tool can be effective in further determining what I need to do to reduce my spending.
If you’re interested in trying it out, there’s a 7-day free trial to use the software. Then, you can use it for as low as $10.95 per month. You can try it out here. It’s an affiliate link, so if you visit the website through that link and purchase the software, then I will get compensated.
Conclusion & Bonus Tool
Budgeting is the first step to us getting out of the American Nightmare and achieving the real American Dream. While each tool has its pros and cons, just remember that they each play a vital role in helping you get to where you want to be in life. Each tool is your GPS to financial peace.
But, there is one more tool I forgot to mention.
As I said earlier, the personal budget planning software that I mentioned act as a road map to achieve your financial goals. However, there’s one caveat. You need to know where you want to be.
You can have a road map or Google Maps installed on your phone and be ready to take the ride to your friend’s house. But, if you don’t have your friends address, how do you know that you’ve arrived. It’s a waste of time.
One of the first things is to figure out what you financial goals are. Where do you want to be in life; financially? There’s one more tool that I use to help me figure that out. It’s called the Cashflow Strategist. What is it?
The Cashflow Strategist is made by the same people who made the Cashflow Manager. It helps you to determine what your financial goals are, prioritize the goals, calculate how long it will take to pay off credit card debt with additional income, predict your rate of return on investments, and much more. It’s a tool that similar to what a financial planner would use to help you achieve your goals.
It’s a tool I’m currently using to help me reach a really big decision in my life. The Cashflow Strategist, with the Cashflow Manager AND the other tools mentioned in this article can help with being more financially responsible. If you are interested in trying the Cashflow Strategist + the Cashflow Manager for free for 7 days, you can go through my affiliate link.
Do you know of any other budgeting tools and life hacks that can help to wake up from our American Nightmare? Have you tried any of the products listed above? What did you like or not like about them? I’d like to hear your thoughts.