Discover Your Budget Style

So I've been getting Money and Forbes Magazines for the past few months. Just as an aside, I've decided to stop my subscription to Forbes Magazine though. The writing is a bit over my little ol' head and from all the Obama bashing going on between those pages, I'm starting to think that the powers-that-be at The Forbes Mag may be just a little bit too right-wing for me.

Don't get me wrong. I'm not left or right in terms of politics. I'd like to consider myself wrong or right. I base my beliefs and feelings on the right thing to do, not what my political affiliation is.

But anyway, back to the topic at hand. So I'm pouring over the Money Magazine (love this mag, BTW!) and I come across this article about how to discover your budgeting style and I think I've finally found a budget that might work for me and I'm so excited!!!

The author, Ismat Sarah Mangla, goes into detail about 3 different styles. The first one, and my favorite, is the The Bucket Budget. The other two are The Budget Boot Camp and The Stick Strategy.

The Bucket Budget appealed to me because it is totally hands-off, and there is very little work involved. My past experiences with budgeting failed dismally because it was just way too hard. Much like dieting and going to the dentist...we know these things are good for us, but they just aren't that pleasant to do! And me being the Diva that I am, I just can't get with doing anything that is the least bit unpleasant! But with the economy the way it is, people getting laid off all over the place and the stock market going from red to green and back on daily basis, has shown me that I just don't have a choice. Besides I really want to start doing better in this aspect of my life, which is the main reason I started this blog, so that I can track my journey. I've got to start saving some money and setting up some security for me and my family. In terms of different budgeting tools...Yes, yes...I know that some people swear by Quicken and that's awesome for them. But for a lot of us, including me, using traditional budgeting tools is like "trying to fit a round peg into a square hole," says Bill Starnes, a financial planner in Hockessin, DE. Any pre-schooler knows how well that works. It DOESN"T!!!

So how do the rest of us less "compulsive", um....I'm mean less "organized" folks better manage our finances? Stay tuned to this blog to learn some alternatives that achieve the same goals as a traditional budget, which is to live within our means and meet our savings target. Think about why your last budget didn't work, or why you never even started one in the first place, then decide which of these will work best for you. Be sure to drop me a line to let me know how it's going.

The Bucket Budget - How it works: You'll need three bank accounts -- two checking, one high-yield savings. First figure out how much of every paycheck you want to put toward savings. Have that automatically sent to the savings account, which serves as a future-goals way station; you can redirect it later.

Send the rest of your paycheck to checking account No. 1. (Talk to your payroll department to set up multiple direct deposits.) From this you'll pay monthly fixed expenses, such as mortgage and utilities; set up automatic bill payment online.

Figure out your monthly surplus in this account after recurring bills, divide by four, and set up a weekly automatic transfer for that amount to checking account No. 2. This is for variable expenses like groceries, entertainment, and eating out. Two rules: You can't transfer more money over until the next week, and you can can't use credit cards.

Why It'll Work for You: "This gets you away from micromanaging," says financial planner Eric Kies, who helped develp this system, called First Step Cash Management. In fact, it basically manages itself; all you have to do is watch your balance on the second checking account. The system creates "artificial scarcity," forcing you to live on less and within hard boundaries.

Watch for Budget No. 2 Tomorrow, and don't forget to drop me a line about how this one is working for you, if you chose it.


Diva Mogul Extrodinaire!