A budget is a tool to help you live within your means. With a budget you can allocate your money towards what will be spent and what will be saved for the future. A simple budget lists and compares all your income and your expenses to work out how much is left over. A typical example can be seen in the picture below.
The budget shown above was developed with Microsoft Excel and is available for download here. For many people a simple budget such as the one above will do. However, if you want to follow your money more closely, advanced budget software provides features such as:
- Tracking actual income and expenses against budgeted amounts
- Charts for visually tracking performance,
- Ability to update your budget from your smart phone when you make purchases.
Of course, whether you are budgeting with pen and paper, a spreadsheet, or a smart phone with the latest software, keeping a budget is still about sensibly managing money coming in and going out.