Many people have different preferences and opinions when it comes to budgeting. There are no right and wrong tools when it comes to keeping a budget – often, it is purely down to preference and accessibility, until you find a system which works for you and your family. For example, some people use software packages to help them budget more effectively, such as Microsoft Money or Quicken. However, others prefer simply using a spreadsheet that they have devised in order to log what is coming in and what is going out each month. Some people even use the age old tradition of writing down their income and outgoings in a book and using a calculator to work out their finances!
No matter which method you choose, the important thing is that you need to keep on top of things. You need to keep track of all of the money that comes in and goes out so that you know exactly what your disposable income is. If your outgoings increase, such as if bills increase, you need to make sure you review your budget and make amendments to cater for the increase in bills.
Regularly reviewing your budget is important to ensure that it is up to date. For example, you may be paying off a store card or catalogue balance but if you fail to review you budget you may find that you are still accounting for it in your outgoings even after it has been paid off. On the other hand, failure to regularly revise your budget could result in you failing to account for additional outgoings you have, which could mean that you inadvertently go overdrawn and end up being charged by your bank.