I just wanted to make a mention of Mvelopes Personal Budgeting Software for those people who may not have heard of it. It is based on the envelope system of budgeting, where a certain amount of cash is set aside in an envelope. There is one envelope per category and once the money is gone – you’re done spending in that category until you can replenish it.

I think this is a very simple budgeting method that requires little time to set up and execute. The downside is that you may be tempted to “borrow” from another envelope which completely defeats the purpose.

Now, even easier, is the Mvelopes software. With just a couple of mouseclicks you can fund your different categories and see how much is left to spend. It easily downloads your information directly from your bank automatically. Best of all, it can be accessed from ANYWHERE – including your cell phone.

I’d highly recommend at least giving it a try with their FREE 30 day trial. Just cancel at the end of the 30 days and you’re done. Or continue using it if you really love it and it works for you.

First of all, figure out what money you have coming in.  This may be wages from a job, social security, disability, child support or any other number of sources.  Make sure to figure out the amount of money after taxes (or net amount).

Secondly, spend about a month keeping track of your expenditures.  Make sure you are keeping track of all expenditures – whether paid for by cash, debit or credit card.  If you don’t have a lot of time, you can keep your receipts together and log them at the end of the week.

Here are some guidelines for budget categories:

• Housing (Include rent/mortgage and utilities)
• Food (Groceries and meals out)
• Auto (Car payments, gas, oil, maintenance)
• Insurance (Car, home, life)
• Debt (Make sure you know who you owe money to)
• Entertainment (Movies, books, magazines)
• Clothing
• Savings
• Miscellaneous (Try not to put too much into this category)
• Child Care (If necessary)

Once you have this information you can start to see where your money is going and start readjusting your spending habits.  I’ll show you how to start your budget in a future entry.