Forget the Budget Spreadsheet and Be Smarter With Your Cash


If you want to figure out how much money you're spending, using a budget spreadsheet can give you the most complete picture of where your hard-earned cash goes every month. But spreadsheets can be intimidating to many people. If you're one of them, we'll have some budgeting alternatives for you later in this article to help you stay smart with your cash.

The pros and cons of spreadsheets
As Fool contributor Selena Maranjian discussed late last month, a budget spreadsheet can be a useful tool in tracking your money. By helping you keep track of every last penny that you spend and giving you complete flexibility in dividing your expenses into as many relevant categories as you see fit to create, building your own spreadsheet lets you tailor your budgeting strategy to play to your own particular strengths and avoid your specific weaknesses.

But for many people, the thought of having to open up Excel every single day to record every little purchase they make is enough to make them give up on budgeting entirely. That's unfortunate, because as valuable as a budget spreadsheet can be, it's far from the only way to track your spending, and many would say that it's not even the best way.

Letting the cloud handle your finances
Online budgeting services have attracted many users who don't want to mess with spreadsheets. One of the most popular is, operated by Intuit . Mint lets you create the same budget categories online that you might otherwise do on a spreadsheet. But rather than forcing you to make entries manually, Mint allows you to connect your financial accounts, including checking accounts and credit cards, to its tracking software. In turn, Mint can then monitor your spending via credit and debit cards and checks while minimizing the need for special entries, which become necessary only for cash transactions and other purchases that Mint can't track.

Many credit card companies offer a less complete alternative to full-service programs like Mint. Citigroup , Bank of America , and JPMorgan's Chase card unit all offer end-of-year summaries of spending on at least some of their cards, so if you use a single card for most of your purchases, it can act as a budget resource of sorts. Discover Financial offers a spending analyzer that lets you break down your spending by category in pretty much any time frame you care to use, while American Express gives a full online spending and finance-tracking system to its Open business-card customers that lets you slice and dice your transactions pretty much any way you see fit.

Going low-tech
On the other end of the spectrum, many people prefer to budget the old-fashioned way: with cash. A very simple system involves taking the cash from your paycheck and putting it in different envelopes representing the various categories of spending you have.

For instance, when you go to the grocery store, you take the grocery envelope with you. By the end of the month, you'll know how much you've spent and how much you have left in each category. Moreover, the system imposes discipline, since if you don't have the money available in that envelope, borrowing from another takes specific effort.

Stay smart with your money
A budget spreadsheet can be extremely useful. But if you prefer to budget by other means, don't feel pressured to use a spreadsheet. Alternatives like custom budgeting software or the old-style envelope method can help you do just as good a job of keeping track of your spending.

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Fool contributor Dan Caplinger owns warrants on Bank of America and JPMorgan Chase. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends American Express and Intuit. The Motley Fool owns shares of Bank of America, Citigroup, Intuit, and JPMorgan Chase. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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