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Five Reasons Why You Need a Budget Using Quicken or Mint.com

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Ok, I said the “B” word.  Nobody likes the “B” word…people don’t like restrictions, especially financial ones.  Sad to say, a lot of people, especially those in the younger generation, are not taking the time to create a personal budget for themselves or for their families. Whether it is because they feel as if they are too busy – after all, creating a budget and making sure you are staying on that budget does require time and effort – or because they simply do not see any value in using a budget, people who go through life without a budget are working against themselves.

Without a budget, you will never have the urge to curb your spending. You will never say “I will wait until I have saved enough money to make that purchase.” Instead, you will use whatever money you have on hand, and if money is in short supply, a credit card will do the trick. After all, we live in a society that seems to operate under the “instant gratification” rule, and that is something that is very hard to overcome…especially if you have not been denying yourself when it comes to spending money. (Especially money that you do not have!)

If you keep on operating under the “instant gratification” rule, you should not be surprised to find yourself racking up a mountain of credit card debts. And if you run into a situation where your income is suddenly gone, either from a layoff or getting fired from your job, then you may eventually have to consider filing for bankruptcy. Personal bankruptcies have reached an all time high in the United States.

Here are some very important reasons why you need to be living on a personal budget:

· You will have a financial plan in place that sets limits on the amount of money you spend.

· You will have a financial plan in place that will allow you to set aside a sum of money each month for savings (even if it is a small amount).

· You will have a financial plan in place that will allow you to start paying off your debts.

· You will have a financial plan in place that allows you to start an emergency fund. (And ordering a pizza on a Friday evening is not an emergency!)

· You will have a financial plan in place that allows you to start saving for bigger purchases and help you from wasting your hard-earned money!

How You Can Start…or Begin Again!

Today’s major banks have personal financial management software that comes with their online banking accounts.  If you’d like other options, check out sites like Mint.com and Quicken.com who offer free trials or free packages.  Plus they can import your bank account information online through “syncing” you bank info through their secure servers.  Once you have your bank info imported into your Mint or Quicken account, you can then begin categorizing where you have been spending your money.  Here’s my favorite part…you can run a report and you will see in color graphs and pie charts where your money is going.

Need to learn with colors and pictures? Quicken Reports can help!

What I’ve learned is that we always have plans “at least” in our head.  But we are creatures of what we actually DO.  Being able to view how much money actually goes to Starbucks coffee breaks, gas and car insurance or weekend ATM withdrawals for a night(s) out in town…shows up nice and clear in BIG PICTURES.  (This is especially important for you military folk…LOL!)

You may not like what you see but at least you can visually see what improvement you need to make and were you might need some positive reinforcement and coaching tips.  Students and listeners who have begun to use personal finance software such as Quicken or Mint.com report less overdraft fees, embarrassing credit card declines while they do their shopping and finding more confidence in carrying our their savings plan.

Have you tried Quicken or Mint.com before?  What was your experience?  Have you continued to use their personal financial management software packages?

The reason why many big businesses and top entrepreneurs continue to innovate and stay ahead is because they have a board of directors or shareholders they must stay accountable to.  They must provide proper financial statements and reports.

The big failure of many households, young families and small businesses is they lack this type of accountability.  Using personal finance software such as Quicken or Mint.com helps you stay on track and allows you to have more quality conversations with your tax preparer, accountant, financial planner, CPA or wealth-building coach.

Get started today!!

Currently there are "3 comments" on this Article:

  1. Chad Smith says:

    Great post Matthew! I’ve been using Quicken for 10 years now and it’s amazing the freedom it has provided my wife and I in managing our spending. A helpful hint in using Quicken effectively is to minimize the amount of categories you use. This is where most people get overwhelmed. The amount of categories that Quicken comes with can derail you from deriving meaningful data to curb your spending. Limiting your categories to 8-10, will help you more accurately track where your money is really going. Give it a try. You may be surprised at the comfort you gain from monitoring where you are spending those hard-earned dollars. Also check out http://www.finsymnews.com/budgeting/ where we describe some other common excuses people use when it comes to budgeting.

  2. CHAD! I appreciate your helpful comment AND post from your blog as well! I know what you mean about the categories…I made the same mistake of having too many. Everyone…go check out Chad’s post on common excuses for not budgeting!

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