Is your budget or spending plan working for you? Having a budget enables a person to accomplish the following

• To spend money wisely
• To achieve financial goals
• To live within his means
• To prepare for financial emergencies
• To develop proper money management habits

If your current budgeting system is not helping you to accomplish the above, don’t worry as you are free to change and adopt a new system. That is if you want to. Common budgeting mistakes to avoid are failing to save, underestimating expenses, never having a budget or a spending plan and making no preparation for big expenses (e.g. vacations, home repairs).

The main purpose you are creating a budget is to plan or to outline how you will spend your income. Below are several budgeting systems you can try out and it is not uncommon to have more than one system in place.

A written budget

A written budget is versatile. You can use a common format comprising a spreadsheet with different columns detailing budgeted and actual expenses. Some people resort to using a notebook, accounting paper or a budget record book. This is my favorite system and I use a spreadsheet as well as a print-out form.

A physical budget

This method allows a person to see the actual amount of money being allocated for various purposes. Common methods involve using envelopes, jars or containers or folders. Fix amount of money will be allocated for “Food,” “Transportation,” “Entertainment,” etc. This method may suit a beginner and it really works for children. It is like having several piggy-banks targeted for different purposes.

A computerized system

A budgeting system can be developed using spreadsheet software. You can also get free Excel budget templates online. Using money management software (e.g. Quicken) can help you in creating a budget in addition to accomplishing other financial planning tasks.

Online budget

An online budget is available from financial institutions or banks and websites like

A budgeting app

Almost everyone carries a mobile phone nowadays especially working adults who can’t seem to function without one. Budgeting apps can be downloaded for free and they vary in features and complexity.

A mental budget

A mental budget can be misleading as it exists only in a person’s mind. It is understandably hard to keep track of various spending allocations when everything is done “in your head.”

You may want to discard the last suggestion above as you want a system that is accurate and helps you achieve your financial goals.

Which/what kind of budgeting system are you currently using?

Jacquelyn is the co-author of the books “Teaching Your Kids About Money” and “Top 93 Personal Finance FAQs in Malaysia” with KC Lau. Jacquelyn is the pseudonym used by Amy Sipagal.

    3 replies to "Choosing the Right Budgeting System for You"

    • baihaqi hassan

      thanks a lot..
      is it secure if we save our budget in account on-line?
      i know we can make security for it, but i don’t think the securty is strong enough.
      at least, the admin of the website know my money..
      am i right?

    • […] the recent past, I have covered “Choosing the Right Budgeting System For You”, “Budgeting Revisited” and “Personal Financial System” which are all major money […]

    • Budgeting Revisited

      […] Wealth Management This is a follow-up article on an earlier posting entitled “Choosing the Right Budgeting System for You.” There are some people who scoff at the idea of keeping a budget or having a spending plan. […]

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