Budgeting: Leather-bound ledger and quill now optional.Source: Rosier. Source: Wikimedia Commons.
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It's understandable that for those of us who hate budgeting (cough cough), our perception of the task is somewhat... skewed. For example, to me, budgeting always seemed to involve a spreadsheet, a pocket protector, and possibly a leather-bound ledger.
Fortunately for me and everyone else who recoils at the thought, there are other ways to track spending that are pocket protector-optional. What are they? I'm glad you asked.
1. Cash only
Cash: It's so simple, so ingenious.
To budget using cash, all you have to do is withdraw the allocated amount of cash from your bank account and... not use anything else or anything more than what you have on-hand. It's brilliant in its simplicity and the complete idiot-proofness of its mathematics. There's just no way to convince yourself that you have more money than is actually in your wallet.
This is important for some of us.
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Cash-only is closely related to the "envelope method," in which you put cash in designated envelopes, but if you're not into spreadsheets, you might even find that a bit complicated and time-consuming. That's why, to make carrying cash successful, I would advise automating all fixed expenses and just using it for discretionary purposes.
When it comes to budgeting, after all, simple is better.
The biggest drawback of the cash method is, of course, cheating. I know few people who would leave home without some sort of plastic, but at least carrying cash will force you to think twice.
In this day and age, there are near limitless possibilities for tracking your spending using online tools. I won't recommend any one or the other, but considering the various options, you are sure to find one you like.
The nice thing about technology is that it tracks not only your outflows, but the big picture, too. So if you want to pay down debt or save up for something in particular, you can keep an eye on those as well as your line-item budgets.
You can also manage several budgets at once, which can be difficult if you don't want to carry envelopes of cash around.
The downside is that it still requires an investment of time, and (for this hardened anti-budgeter at least) it is very easy to forget about. Your accounting app will not, in other words, take the place of Facebook on your phone: You won't need to delete it to ignore it.
So, if you struggle to pay attention to your finances, you might find it takes concerted effort to develop the habit through this method.
3. Separate accounts
If cash isn't your thing, and software requires too much effort, you always have the option of using separate accounts to manage your discretionary spending.
What that essentially entails is setting up an account specifically for spending money, removing any and all overdraft protections, and allowing yourself to use only this account for spending.
I call it the "brute force" method in my head because it is, well, quite a forceful way of getting the job done. It's also surprisingly effective, because there is no leeway, and there are no guardrails. If you spend too much, your card will get declined, and then you'll feel bad.
This is closely related to the idea of keeping separate accounts for your investments; for example, one big pot of money for the slow long-term growth and another for short-term trading. On both fronts, it's a really nice way to prevent the cowboy in your head from getting away from you, which is great for preserving your willpower for more important things, like whether or not to have ice cream for lunch.
I also like it because it doesn't involve any math or any remembering about this budget versus that one. You end up checking your balance because you have no choice but to check it, which makes life a lot simpler.
So, there you have it. Three methods that could work to manage your budgets, and none of them involve a calculator. Which would you choose?
The article 3 Ways to Keep a Budget for Those Who Hate Spreadsheets originally appeared on Fool.com.
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