Home > 2015 > Personal Finance

3 Ways to Create a Budget Without Doing It From Scratch

Advertiser Disclosure Comments 0 Comments

I’m not going to lie – budgeting isn’t fun. Spending money is fun. Budgeting is less fun. But do you know what is more fun than just spending money? Spending without regret. Without guilt.

A budget is work, but a budget allows you to spend your hard-earned money without feeling guilty about it. With a budget, you’re able to know where you money goes and ensure that you have enough left over to save for the important long-term goals in your life. A budget can show you that your spending is reasonable, that you’re saving enough each month towards a down payment for your home or to pay off credit card debt.

A budget is a valuable tool and an important money skill that can help you see into your spending future. It can help you prepare a plan of attack towards your savings goals in the event you fall short. Most importantly, a budget takes this nebulous part of your financial life and puts it into focus. It takes the unknown and makes it known. And best of all, it’s easy to establish. Let me show you how.

1. Leverage a Money Management Tool

The easiest way to create a budget is to start with what you have. You’re already spending money. If you’re using a credit card, you can take advantage of money management tools to help figure out where you’re spending that money. Mint is one of the most popular tools offering these services, but there are plenty competitors like Personal Capital and Power Wallet.

A money management tool will automatically download all of your transactions. Not only will it enter in transactions, it’ll categorize them too. You can modify these categories to fit the things you care about.

Mint, for example, has several food categories: Food & Dining, Restaurants, Groceries, and Alcohol & Bars. You may decide that you want to focus on two categories – food you prepare at home and food you consume in an establishment. You can train the money management tool to put Restaurants and Alcohol & Bars into the Food & Dining category while keeping Groceries separate.

Now you can manage your budget at a level you care about, not the one set by the software. Sophisticated money management tools make this step easy and remember your preferences.

2. Set Goals …

Now that you have a “current budget,” it’s time to look towards your goals. With an idea of what you spend each month, you now have a grasp on how much you’re saving. The big question is – are you saving enough? The answer will lie in your goals.

For example, if your goal is to save up a $1,000 emergency fund within a year, you’ll need to save $84 a month. Let’s say the difference between your after-tax income and your monthly expenses is only $50. It’s clear you won’t reach your goal. You need to find an additional $34 in savings somewhere.

3. Then Establish a Transition Plan

Use the base budget to find where those extra dollars could come from.

Are there spending categories you can reduce to help you reach your goal? Instead of just cutting back everywhere, which is hard to sustain in the long term, you can pick where you want to cut back and for how long.

Perhaps you’re going out to bars and restaurants too often? You could decide that this is the month you skip one Friday Happy Hour but next month you’ll skip one Friday lunch. Or maybe you brown bag lunch for the week this month, but skip something else the next. Making these types of cuts can stop your from going on a spending binge when your willpower runs out (and it will!).

Remember, to have fun with your budget. They do take work to maintain but through the use of tools you can get all of the benefits without nearly all of the work.

More Money-Saving Reads:

Image: Ridofranz

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Certain credit cards and other financial products mentioned in this and other articles on Credit.com News & Advice may also be offered through Credit.com product pages, and Credit.com will be compensated if our users apply for and ultimately sign up for any of these cards or products. However, this relationship does not result in any preferential editorial treatment.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Our Owners

Credit.com is owned by Progrexion Holdings Inc. which is the owner and administrator of a number of business related to credit and credit repair, including CreditRepair.com, and eFolks. In addition, Progrexion also provides services to Lexington Law Firm as a third party provider. Despite being owned by Progrexion, it is not the role of the Credit.com editorial team to advocate the use of the company’s other services. In articles, reporters may mention credit repair as an option, for example, but we’ll also be sure to note the various alternatives to that service. Furthermore, you may see ads for credit repair services on Credit.com, but the editorial team isn’t responsible for the creation or implementation of those ads, anymore than reporters for the New York Times or Washington Post are responsible for the ads on their sites.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team