Four easy ways to manage your budget and still have time for your life
Managing your money shouldn’t take hours. Learn how to simplify your budget so it’s easier to manage in just minutes a month.
Some people have the budgeting bug. For them, there’s a special thrill that comes with creating, following and tracking a highly detailed plan for their money.
But for most, a budget is simply a means to an end — a road map for achieving your financial goals. So you want a tool that’s reliable and effective...but definitely not finicky.
If a high-maintenance budget has been monopolizing your time or even preventing you from creating a blueprint for your money, we might be able to help you out. In fact, you can get back to your life while managing your budget successfully for just minutes a month.
1. Start with a super-simple budget.
An unnecessarily complex budget takes time to monitor and maintain. When your financial plan includes tons of tiny moving parts, it’s easy to spend an hour or more each week on tracking, categorizing and analyzing your expenses.
So if you’re looking to streamline your process, cut down the clutter. Instead of splitting your income across 100 spending categories, choose a simple breakdown. Limit yourself to a maximum of 10 categories. For instance, your buckets might include housing, utilities, transportation, food, clothing, entertainment, savings and miscellaneous spending.
Or you may choose to go completely bare-bones with the 50/30/20 rule. This three-pronged budget allocates 50% of your take-home pay to necessities, 30% to extras, and 20% to savings and debt repayment.
2. Automate your money’s movements.
In the old days, managing your finances — even the repetitive elements — was a largely manual process. But the benefits of automation allow you to set and forget many of the mundane money tasks you tackle each month. For instance...
- Create recurring bank transfers. Funnel cash each month from your savings account to your checking account to cover upcoming bills. You may even move funds periodically to special savings accounts for upcoming vacations, holidays and more.
- Set up bill payments. Allow your utility company, mortgage lender, credit card company or child’s school to pull funds directly from your checking account. You can also look into whether your bank permits you to dispense recurring payments directly through its system.
- Invest easily. Dollar-cost averaging, dividends reinvestment and portfolio rebalancing are time-consuming tasks that require you to set (and keep) frequent appointments with your investment, retirement or college savings accounts. Instead, automate your contributions with monthly or quarterly bank withdrawals. You might even consider using your brokerage firm’s robo-advisor to reinvest earnings and maintain your desired asset allocation.
3. Leverage technology.
When you’re looking to simplify your budget maintenance process, skip clunky pen-and-paper expense tracking. Instead, find a modern, smart tool that will download, organize and categorize your income and expenses for you.
If you’re looking for a robust but flexible app, consider Mint or You Need a Budget. If you need powerhouse desktop software to support complex finances or produce detailed reports, installing Quicken may be the best option for you.
Keep in mind that you’ll need to commit some time upfront to setting up the software, learning the basics and customizing the features to your needs. You may want to create some personalized alerts or specialized reports that you can reference regularly.
And, each month, you’ll probably spend at least some time with your chosen app — adding notes to your transactions (“birthday gift for Dad”), correcting miscategorization of your imported expenditures and manually entering cash transactions you want to track.
4. Handle tasks that require a human touch.
Technology has its limits when it comes to your financial maintenance. While you can outsource much of the effort to automation and software, there are some tasks only a human can do. Focus your attention on those activities:
- Handle the manual stuff. While many recurring payments can be automated, most one-off bills have to be paid by hand. Consider your bills for medical appointments, plumbing repairs and summer camp fees. Reduce the time you spend on these by tackling all outstanding bills twice a month.
Review your statements. Do all the recorded charges belong to you? Are the amounts correct? You’ll want to catch errors or fraud as early as possible.
- Analyze your credit reports. Order your three free credit reports every year. It takes only a few minutes to confirm the details of your credit history and note any discrepancies you need to report.
- Review key metrics. What numbers are important for you personally to track? Set reminders to analyze your favorite financial reports. Those might include a summary of actual vs. budgeted expenses, net worth over time or progress toward specific savings goals.
- Take a big-picture view of your finances. What’s working in your budget? Where are you feeling a squeeze? Do recent life changes necessitate an overhaul of your financial plan?
- Talk with your partner. If your financial hopes and dreams are coupled to someone else’s, schedule regular meetings to check in and refocus. Redefine financial goals as needed, and look ahead to big expenses that are coming down the pike.
Managing your money is just one aspect of your busy life. With the right budget and a smart strategy, you can live your life while staying on course to reach your financial dreams.