It’s time to create your working budget. Up to this point we’ve created a master budget which helped us prioritized our expenses. It also helped us to make sure on an “average” month we can cover our necessary expenses.

The working budget is a different beast. The working budget is used from month-to-month and is an active and living document. While many expenses in a working budget will be nice and clean like the master budget, there will also be many expenses that are unexpected, inaccurate, and just plain wrong. And that’s ok because that’s how life is. The secret is to create a document and follow a process that will allow you to account for those flaws and surprises life throws at you.

Over the next few posts I will be showing you three basic ways to create your budget. These are listed in recommended order:

1. Using You Need A Budget (YNAB) budgeting software.
2. Using Quicken combined with a spreadsheet.
3. Using pen and paper or a spreadsheet exclusively.

I’ve mentioned in the past a surprise tool that I use to do my budgeting. That tool is called You Need A Budget, or YNAB for short. This is the software I personally use and recommend for budgeting. Believe me, I’ve tried a wide variety of tools and have come up with some pretty cool tricks in the process, but YNAB beats them all in terms of simplicity and effectiveness.

Having said that I will still be showing how to do a budget using the other two options. They can still work well, they just require more work. My wife will actually be doing a screencast showing how she does a zero-based budget using Quicken. It’s a cool little hack you won’t want to miss if Quicken is your tool of choice. Either way, it’s worth checking out the upcoming information on YNAB to see of that tools is right for you.

I’ll be releasing posts in the order listed above which is also listed by preference. This actually ended up being good timing since we’re just starting a new month and it’s a great time to start your budget.

Stay tuned.

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