This article originally appeared on Debt.com
A good personal budget is the foundation you need to achieve financial stability. Learning how to budget is essential if you want to get out of debt and avoid overspending that leads to new debt. It’s also the best way to save money over time, so you can achieve your financial goals.
What is the best budgeting software?
Finding the best budgeting tool really depends on you! Budgeting is pretty notorious for being a hassle. People who start a budget say it can be difficult to keep up. So, you need to find a budgeting tool that makes it as easy and hassle-free as possible. That varies based on who you are. In fact, a 2019 debt.com survey found that 66% of people still opt for pen and paper budgeting and 32% use spreadsheets to maintain at least some of their household budget.
So, as you start to think about how to make a budget, consider these options:
- Budget spreadsheets, that you either make or get through companies like Tiller
- Desktop budgeting software, such as Quicken
- Budget apps, like Mint and You Need a Budget (YNAB)
Debt.com compares three top budgeting apps
| Feature | Tiller | You Need a Budget (YNAB) | Mint |
|---|---|---|---|
| Type of budgeting tool | Budget spreadsheet | Budget app | Budget app |
| Cost | $59 / year ($4.92 / month) | $84 / year ($6.99 / month) | Free |
| Free trial? | 30 days | 2 months | n/a |
| Syncing | Banks, credit cards | Banks, credit cards | Banks, credit cards, investment accounts |
| Auto-categorization | Yes | Yes | Yes |
| Security | 256-bit AES encryption | 128-bit AES encryption | 256-bit AES encryption |
| Alerts | Daily email update | Smartphone notifications | Smartphone notifications and email |
If you prefer paper and pencil budgeting…
No matter how technologically savvy you are, sometimes it just feels better to budget the old-fashioned way. If you prefer this method but you’re not sure where to start, there are plenty of print-out templates that make it really simple. For example, the bloggers behind The Savvy Couple created a downloadable and printable budgeting binder. It’s a fun and colorful way to kick-start your paper and pencil budgeting strategy.
Start a personal budget from the ground up
If you’ve never made a budget before, it can be a good idea to start with some basics. That way, you have the foundation you need to build an effective daily spending plan that keeps you on track.
While most budget apps today will walk you through the process of setting up a budget, it can still be useful to know the steps before you get started. That way, you can make sure that the budgeting tool you chose does everything you need it to do.
With that in mind, Debt.com created a step-by-step guide for How to Make a Budget. It will teach you the ropes, so you can evaluate different tools and find the best solution for your needs.
Make budgeting a daily habit
Once you’ve laid the groundwork for your budget, you need to make sure you can maintain it long-term. There are some common pitfalls that often lead people to stop budgeting, which leads to overspending and debt. But there are some easy steps you can take to stay on track with your finances and making budgeting a daily habit you can keep.
Get 20 tips for maintaining a budget long-term »
Building a budget that fits your specific needs and goals
Every financial situation is unique, and you need a budget that takes where you are in life into account. The budget you need right out of college should help you save for major life goals, like getting married and buying your first home. That’s vastly different from the budget you need as you head into retirement and face the challenges of a reduced fixed income.
With that in mind, Debt.com offers a series of budgeting guides designed for specific life stages. These guides offer tips for people who need each budget to help them overcome the unique challenges they face.
Budgeting for women
Women have some unique concerns when it comes to managing money. Women make less, but often have more expenses to cover. This budgeting guide helps women make a budget that works for achieving their goals and avoiding overspending. Whether you’re single, a single mom, a stay-at-home mom or the primary breadwinner in your household, we have some financial advice you can use.
Set up a practical spending plan »
Budgeting for couples
Managing your money is challenging enough when you’re single, but it’s doubly hard when you add another person into the mix. You need a budget that blends your finances and your financial goals effectively. Learn how to build a budget together that helps you transition from tow financial strategies to one that meets both partners’ needs.
Make a budget that meets both your needs »
Making an effective family budget
Did you know that the cost of raising one child to the age of 18 is more than a quarter of a million dollars? Kids are expensive, so you need a budget that takes all of their needs and wants into account, while also allowing you to save for their future. We explain how to create a family budget that everyone can get on board with.
Build a family budget that works »
Budgeting for seniors
As you transition from your career into retirement, you’re going to encounter some unique financial concerns. This guide explains how to make the right adjustments to live on a limited fixed income and how you can avoid debt and save effectively during your retirement to avoid financial hardship.
Budget for your golden years »
Budgeting for specific events
A basic household budget will keep you on track with your daily spending. But there are certain events that can throw even the most well-laid budget off. Whether it’s holiday overspending or a turn in the economy, a little foresight and planning can go a long way in helping you maintain financial stability.
Making a holiday budget
The holidays are the most expensive time of year for most households. The average family shells out over $1,000 to make the season merry and bright. It’s no wonder that so many people start the New Year with a holiday debt hangover. But this guide can help you build a holiday budget, so you can avoid added credit card debt this year.
Avoid holiday debt with the right spending plan »
Vacation budgeting
Studies show that roughly 90% of Americans take on credit card debt when they take a vacation. This guide helps you learn how to vacation on a budget so you can avoid bringing debt home as a souvenir. Learn smart ways to plan your trip and make reservations so you can stay on budget and avoid increasing your credit card balances.
Set a practical budget for next vacation »
Build a budget to survive the next recession
An economic downturn can do major damage to your finances, especially if you lose your job during a period of high unemployment. But if you start planning and saving now, you can minimize the risk of financial hardship during a recession. Learn how to recession-proof your finances today so you can weather the next financial storm.
Learn how to make your finances recession-proof »
Planning for funeral costs
Funeral costs can lead to significant financial challenges for surviving family members. The average funeral costs $9,000 and that total can be even higher, depending on where you live. This guide helps you understand the costs that you can face and how to plan effectively for the future to minimize the burden on your loved ones.
