A personal budget planner can help you get your finances under control; prepare for emergencies; and save for a home, school, or high-ticket items that you really want. For many people, just knowing where their money is coming from and going to can be a huge help in maintaining a personal and household budget. Selecting a personal budget planner is often a matter of determining which medium you can best work with and, after narrowing your choices down, deciding which features best suit your lifestyle, financial resources, and spending habits.
Prior to the widespread use and acceptance of personal computers, many people did their personal budgeting on paper and sorted their household money into envelopes. Each envelope represented the money needed for a specific need, such as groceries, laundry, and utilities. While this method may seem clunky and cash in envelopes is vulnerable to theft, it is a time-honored method that can still work for some. It may also be a good remedial method of planning a budget if you have had a significant problem with overspending on credit cards and debit card overdrafts. By working entirely with cash for a few weeks or even months, you may develop a better understanding of your cash flow.
Another alternative is using a spreadsheet as a personal budget planner. Many home office software packages include spreadsheets, and they are often easy to learn and use. You can enter your income and expenses into your spreadsheet and then break down your spending into pie-chart or other graphical representations. On the downside, you have to remember to enter your income and spending each day. If you are the forgetful sort or if you have a hectic schedule, this could prove burdensome.
You could also buy personal budget planner software, which is custom designed for personal budgeting. In some cases, this software also has a web-based counterpart that can be linked up to your credit card, bank, and investment accounts. The advantage of this sort of personal budget planner is that your spending and income are automatically entered into your budget planner, keeping you accountable and saving you time. These programs and websites often provide personal finance education along with budgeting tools. A potential downside to using an Internet-based or linked personal budget planner is privacy. While you have the convenience of automatic updating, the company that sponsors the budget planner is able to compile a lot of information about you. Even worse, if the company's systems are compromised, your financial information could be vulnerable to theft.