Hi there and Happy Wednesday.
We’re 2 weeks into 2014, and I hope your year is off to a great start.
Perhaps you’ve made a resolution to do a better job with your personal finances in 2014, and for many, that involves setting up and attempting to stick with a budget.
But no one likes budgeting. No one.
It’s a backward-looking process where you’re grading yourself to see if you spent (or didn’t spend) what you set out to. And when your spending is out of line with your targets, it can quickly become a guilt-filled exercise in frustration.
And even if you’re sticking to a budget, some of you will still kick yourself because you “could have done better.”
I think it’s smart to regularly review all your spending to make sure you’re not losing money to “grey charges.”
You Need A Budget or Tiller are great tools to help with this. Another is Mint. I’ve tested and used many of these and currently use You Need A Budget myself. They can help you monitor your expense activity and be proactive when big retailers have their data compromised.
But even if you’re already using Mint or Quicken or another tool for traditional budgeting, I think there is a better way.
It’s called the First Step Cash Management System, and it was developed by Marty Kurtz, a financial planner in Illinois.
I like to call it the “3 buckets” system.
Rather than attempting to explain the details of this approach in this article, I’d like to encourage you to watch this video when you have some time. It’s just over 9 minutes long and is presented by another financial planner walking through the bucket system and how it works.
And unlike BillGuard and Mint, you don’t need any fancy software or apps to utilize this system with your own finances. It’s simple and it helps you give each and every dollar that you earn a purpose.
Many of my clients do a great job staying on top of their cash flow and live within their means, but when I encounter someone that needs some help with their financial household, I explain the 3 bucket system to them.
And if you have any questions, need anything or would like to discuss the “3 buckets,” please leave a comment below or contact me directly.