Question

How would you track a budget? Discuss three different methods to track a budget.

Answer 1

Track a budget:

To tarck a Budget, first we have to set our goals.Figure out what priorities are for both the near and long-term future. and Write them down and put it somewhere we’ll see them. Thereafter, Start by figuring out exactly how much money we have coming in and how much is going out. At the third and last step, we have to track everything.  if we don’t track it, that’s when actually sticking to the budget becomes nearly impossible.

Three different methods to track a budget:

1. Envelope System: We compile our budget, have an envelope for each category, and put the cash allotted to each category into its corresponding envelope. You spend cash through the month, and when your envelope(s) run out, you stop spending for that category. Easy peasy. This method is simple and effective. If anyone is new to budgeting, it doesn’t get more real than the envelope system — which is often what new budgeters need. Once the money’s gone, you can’t spend anymore. Cash is also a more tangible representation of money (unlike debit/credit cards) which psychologically makes it more difficult to spend.

2. Excel spreadsheet: If we like using Excel (seek help) or if you don’t have a smartphone, an Excel spreadsheet might be right up your alley. we do use it to track our net worth. We can create your own Excel budget or find a pre-made template online and customize it to your liking. With an Excel spreadsheet, we can easily see a complete overview of our budget, and it’s on a screen that’s bigger than our hand! We can look back on past months to see what’s working and what’s not, and it’s easy to customize. We can also use whatever form of payment (cash, card, etc.) we want since we’re adding your expenses manually, anyway.

3. Handwritten: If handwritten notes and lists are where we’re most effective, having a hand-recorded budget might be a good option for us. We can print one out and put it on your fridge, keep it in a notebook in your purse, etc. Active budgeting doesn’t get more active than a handwritten budget. Each and every expense will be burned into our consciousness because we had to write it down afterward.