New Years: Budgeting for 2013

Let's get serious for a moment and talk money. The New Year is hours away and listed among the resolutions of many of us are financial goals, especially maintaining a reasonable budget. I've come to believe that knowing how to budget well is a modern survival skill, like building a fire or knowing where to find water. Without it, we either cruise along unaware of how much we spend (and therefore how much we could save!) or we fret over our expenses, not sure what we can afford. Armed with a thorough budget and a good attitude, however, all that can change.

1) I've never budgeted / had a budget that works before... where do I start?

Three words: Zero Balance Budget, meaning Total Income - Total Expenses = $0. I've tried many different methods and this type of budget is the one that paid off my student loans. I consider those excellent credentials! If you're hourly like me, your income may be a moving target, so plan for your average low and adjust every paycheck.

Here is an example based off my own budget (not my real numbers). Note that it is for a two week pay period. I took my regular monthly expenses and divided them in half in order to budget for two week spans.

Pay day, I sit down and put my actual income in the box up top and I fill in each 'envelope' until my expenses EQUAL my income. I can shift everything but the red amounts however I need to (e.g. I'm hosting a New Year's party so less 'Eating Out', more 'Groceries'). And yes, I budget specifically for dancing. :)

2) But how do I make myself stick to this?

That is the ultimate question. The answer to me is two fold: the right attitude and the right tools.

Let's talk attitude first. Sometimes you won't be able to stick to your budget. Your car will break down and everybody will expect you to go out for your mom's birthday when you only have $5 left in the 'Eating Out' envelope. It's going to happen.

But understand the difference between these things and "oh my gosh, those $200 heels are marked down to $80!" or "Steep and Cheap has a Mountain Hardwear Phantom Sleeping Bag for $150!" ... these are both good deals, but babe, if you ain't got it, DON'T SPEND IT. The end. No credit cards unless you're paying it off that same paycheck. If you want something, wait and save. You can do it, I believe in you.

Now tools. You've already heard me sing the praises of EEBA and I'll do it again because it's my personal favorite. If you find a better option for mobile expense recording with an online option, flexible envelope amounts, envelope transfers and transaction history, please, show me. EEBA is as easy as texting.

But whether you use EEBA or some other tool, find something that works for you. Use it. Let it show you how well you're doing and where you need to tighten up.

3) Yeah... your take is ok, but where can I look for more ideas, information and tools?

There are many good free resources online, but to save you the trouble of digging, here are some of my favorites:

• Dave Ramsey - He's the budgeting ninja. I recommend his Gazelle Budget Lite tool for getting started on your zero balance budget. Also check out his Seven Baby Steps and some free downloadable Budgeting Forms.
• How to Create a Zero-Based Budget by Sam - Good article, but nothing else is listed about the author. Good job Sam, whoever you are!
• Best Budget Tracking Apps for Your Smartphone by a guest author on Credit.org (oh looky there, EEBA is on the top of the list... whatdya know!)
• Top 8 Ways To Stick To Your Budget on Investopedia is a nice little pep talk for cultivating that good attitude in practical ways
• 10 Online Budget Tools by Rob Berger - Nice selection of alternative tools if you aren't the app sort

Whatever your approach, make 2013 the year you experience confidence in your spending and celebrate accomplishment in your savings. Happy New Year!