Budget by payment forms

As with your simple budget, there is no generic solution to understanding how you spend your money. We all have different spending habits and ways that we understand our money.

Something I find useful though is to know how much money is spent via automatic payments from my account, how much money I spend as Cash, and how much on my Credit Card. You of course may have multiple credit cards or store cards and if that’s the case it will be very difficult (if not impossible) to budget spending per card. If you have multiple cards then you really need to ask yourself whether you need them all, and if not, start cancelling them. One tip I can give with absolute confidence is that if you want to be in control of your money, you need to keep things simple!

Basic Budget 2

In this example I have simply indicated which categories are paid via Automated Electronic payment, by Cash & by my single Credit Card. In reality, your spending will never be exact, and unplanned things happen. That is fine, as long as you know what your plan is, and can identify where and why things have changed.

The advantage with categorizing spending by type is that you can actually draw the cash you need for the month upfront and you can also keep track of your credit card expenses as you know what is budgeted for your card. When doing this exercise though, have a look at the advantages of using cash and consider using cash for more of your spending.

This is just another way to understand what you are spending money on, and how. Take this concept and make it work for you with your specific circumstances.

As always, take charge of your money!