Budgeting and simple are words that rarely seem appropriate in the same sentence. Budgeting is tedious and time consuming if you want to do it correctly, right? Not necessarily. Although it IS important to spend time carefully planning and setting up your budget, it doesn’t have to turn into a super complicated process every day.
Need a simplified and less time-consuming way to stay on track? There’s an app for that.
The Goodbudget app is modeled after the traditional envelope savings system. For those unfamiliar with the envelope system, it’s a super simple way to divvy up your cash into different savings and spending goals. For example, as soon as Susie gets paid, she splits up her money into envelopes labeled as “Bills,” “Groceries,” “Gas,” “Savings,” and “Fun Money.” The idea is that Susie will not pull money out of her “Bills” envelope to use for anything other than bills. This ensures that bill money is set aside right away and she doesn’t have to worry about scraping together the money later in the month. It’s all too easy to spend money on the wrong things and get off track if you don’t deliberately set aside the money first.
Goodbudget works basically the same way that the physical envelopes do except you don’t need to put actual cash into anything. You aren’t even connecting your bank accounts, there is no risk, you are simply keeping track of your income and spending. The envelopes can be customized to whatever categories you want and you can “fill” them at the beginning of the month (or whenever you want).
The app is highly customizable but simple so it’s easy to set and accomplish your budget goals. You can add or take away money from the envelopes as you make or spend it. There are also helpful options to label each transaction and write notes on them so you know what each entry was for.
How to Get Started
Most of the work is front-loaded when you get started with this app. Once you get it all set up, the rest is a breeze. The first thing you’ll need to do, if you haven’t already, is to plan out what your spending and savings goals are. Find out your income, fixed expenses and do your best to estimate what you spend on things like gas, groceries, eating out and other miscellaneous expenses.
You will then be able to use these numbers and estimates to set achievable goal amounts for each envelope category. Since these are only estimates you may want to tweak the amounts later on. After trying to stay within these budget goals for a month you’ll start to realize whether or not your estimate was practical. The great thing about this app is that you will know where all your money is going and after a few months, you’ll have a much better feel of what you spend too much on and where you can cut back. It also gives you charts that show your spending habits!
Also, you’ll want to be specific about what you want to use this app for. Here are two great ways you can choose to use this app:
- Use the app to manage all of your money and split up your full income into the envelopes. If you do this, it’s extra important to make sure that you have savings envelopes that are off limits or emergency funds only. This way, you can see where all your money is going and get a better idea of what you’re savings are each month.
- Use the app for only non-fixed budget items and only use a portion of your income in the envelopes. This way, you would first take out any bills, monthly savings and other fixed expenses and then split the remainder of your income among the envelopes. This can be a great way to encourage yourself to stay within and below your budget estimates and possibly save even more on top of your savings goals.
The beauty of this app is that once you set up the envelopes each month, it takes little to no time to track your expenses daily. Much like other tracking apps like MyFitnessPal, you simply have to get into the habit of using it. After paying the bill at a restaurant or while you’re at the gas pump it’s easy to take a second to select the category and log what you spent and where you spent it. The app will do the rest for you by showing you if you’re on track with your budget or if you need to stop spending in that area for a certain amount of days.
When you start using it, simply challenge yourself to track your spending daily. Sometimes you’ll be too busy or you’ll forget to log spending if it’s not a habit so just sit down at the end of the day to track what you spent. After a while you’ll find that it’s easier to log it as you spend it and it will become second nature.
You’ll also start noticing that by seeing what you have left in each envelope, you’ll be more likely to spend less in order to stay “in the green” and avoid going over budget. The visual reminders are priceless because it can bring out the competitive side in you and challenge you to end the month in the green with money left over. All of that left over money can either be left in the envelope to give you a bigger budget for next month or it can be swept into a savings envelope.
Try It Out
Not only does this app keep things simple and straight forward, it makes budgeting fun. It adds a little humor or encouragement to your transactions if you go over budget or if it notices you’re staying on track. Seeing the green or red lines and how much you have left for the month is a great incentive for staying on track.
There are a ton of really great budgeting apps out there on the market so even if the Goodbudget app isn’t right for your budgeting needs, I encourage you to shop around and test out a few apps. It’s amazing how a simple app can make something that is usually overwhelming and complicated into something fun and easy. Goodbudget is free so no excuses! Try it out for a month or two, you’ll be surprised at how much you can save when you’re paying attention.