So much to track
The top concern that emerged from our latest reader survey wasn't starting a budget, but sticking to one (45% of you said so). Why?

One of the biggest budget busters is—surprise!—not how you spend, but how tough it is to track the hundreds of transactions you conduct each month: debits and transfers and charges and checks galore.

All that mess gets cleared up in five minutes flat, when you use a budget program like Mint. It downloads AND categorizes your transactions, and it’s less cumbersome to maintain than Excel or Quicken.

Signals to guide you
Both Amanda and MP like Mint because a) it's free and b) it's secure and c) it lets you set a monthly spending target in each category (groceries, car, savings, health, etc.).

Then, it channels those transactions into a color-coded bar chart (see a fullscreen example here) so you can see what your current financial picture is in real-time.



The best way to use Mint is in tandem with the save-to-spend budget that helps you set your own spending and saving goals. Then, use the power of Mint's transaction-tracker to help you automate most of the tracking process (there will always be new transactions Mint doesn’t know how to categorize).

Bottom line

	Try Mint.
	Rant or rave about Mint on DailyWorth.com.

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Erica Sandberg is a credit expert and columnist for Creditcards.com. She is also the author of "Expecting Money: The Essential Financial Plan for New and Growing Families."

Should you co-sign a loan or credit card for a friend or relative? I get this question a lot, as the economy makes it harder for people to obtain loans—and the new CARD Act makes it tough for those under 21 to get credit cards in their own names.

1. It's your debt now. As a co-signer of a credit card—or any bank loan—you are responsible for any money owed. If a friend or relative decides to charge a $3,000 trip to Mexico, say, you are liable for that debt.


2. Your credit is on the line. If the co-signee makes late payments or defaults, guess who the lender will come after? Not only could you end up paying for their debts, your credit would take a hit.


3. Protect your score. In rare cases, when you 100% trust the person, you may want to co-sign. But just remember that their debt will show up on your credit report, and could make you look overextended to creditors, who heavily weigh the percentage of your available credit when calculating your score.

Last, if you're a college student—or know one who is thinking of co-signing on a card for a friend, I have a better idea. Tell them to get a job, even a part-time one. According to the CARD Act, if 18- to 21-year-olds have a regular income source, they don't need anyone else to guarantee the account.

Bottom line
Have you ever co-signed a loan? What happened?

Erica Sandberg is a credit expert and columnist for Creditcards.com. She is also the author of "Expecting Money: The Essential Financial Plan for New and Growing Families."

Join personal finance experts and DailyWorth contributors Galia Gichon & Lora Sasiela for a live teleclass on 7/21 for "How To Gain Financial Sanity: Conquering Your Money Struggles From The Inside Out With Powerful Emotional & Practical Tools." Register here.

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In 1906, an Italian economist named Vilfredo Pareto noticed that 80% of the peas in his garden came from only 20% of the pea pods. (You may have heard that most people wear 20% of their wardrobe 80% of the time.) Enter the Pareto Principle, often called the 80/20 Rule.

How does it apply to money? By becoming aware of this 80/20 ratio and how it works in your life, you can spend less, save more—and earn more.

1. Spend less. You're probably spending at least 80% of your cash on just 20% of your basic expenditures (i.e. rent, groceries, utilities). Simply paring down the items in that 20% category could alter 80% of your spending. (Hint: Parkinson’s Law can help.)


2. Save more. Now look at your spending on non-essentials. What if 20% of the "extras" you buy are yielding 80% of your satisfaction and fun? Identify the key 20%, then cut back other, less-rewarding expenditures (a.k.a., get more bang for your buck). Voila: Sudden savings.


3. It’s Business, Not Personal. If 20% of your clients are bringing in 80% of your income—a common scenario—focus 80% your energy on those winners, and consider dropping those that bring in mere pennies. (Amanda also talked about wasted effort here.)

Count Your Peas!
Take a look at your budget. Can you identify an 80/20 pattern? Tell us about it!

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OK, Ladies: That was an awakening.
In response to our recent poll, about half of you admitted that you either don't have a budget, or the one you have is a bust.

We hear you. We've sung the budget blues. But we also know that the right system can transform your finances from a mess into a well-oiled machine. Try again, this time tackling one small spending area. These five easy steps will build momentum, confidence—and cash.

1. Pick an expense: eating out, gardening supplies, cabs, random recreational activities, etc. Rate it on a scale of 1 to 5 (1 = easy to cut, 5 = requires heavy lifting). Pick an easier area to start.


2. Get a baseline. What's your monthly spend in that area? Read one bank statement to get a tally. Or use online software like Mint, Pearbudget, or Thrive to aggregate your spending.


3. Pick a target. If you're spending, say, $400 a month on groceries, pick a reasonable, lower amount to shoot for.


4. Change habits, not just numbers. Your first impulse will be to cut what you spend, say, on beer or magazines. Instead look at the habits that have inflated your spending—impulse purchases? bringing your kids shopping?—and change those.


5. Save. As you spend less in your target area, funnel some or all of that money into a savings category or into debt payback.

Tell us—are you through with budgets or ready to try again?

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Kenia Perez works in the aerospace industry in California.

Time and money
Give yourself a week to do a task, it will take a week—but give yourself two days, and it will take two days.

This phenomenon is known as Parkinson’s Law, which states: “Work expands so as to fill the time available for its completion.”

The same is true of spending and money.

When budgets expand
The minute you get a raise or even some birthday money, enter Parkinson’s Law: Your spending expands to consume the additional cash.

Here are three ways to regain control over your cashflow:

1. Shrink your numbers: If you give yourself $500 to spend on groceries each month, you will. Lower that limit and you'll surprise yourself by spending less.


2. Be skeptical about “needs”: If you get a $200 raise, don't justify spending it because you "neeeeed" a bigger car, new dishwasher.


3. Keep percentages steady. I strive toward the 50/30/20 Budget (you may prefer the Save-to-Spend Budget plan). Because these budgets rely on percentages, as my earnings go up, my savings and spending also increase—but they remain in balance.

What's bloating your budget?
Don't guess: Read one month's bank statement and report back.

Kenia Perez works in the aerospace industry in California.

Poll
Please pick the statement that best reflects your views. (You can only pick one.)

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Oops, you did it again
The problem with spending plans—whether you have an official budget or not—is that they don't swing with real life demands.

You planned to spend $300 on groceries this month... but friends were visiting and you spent $400. You budgeted $100 for a wedding gift, but found the perfect present for $125.

How do you flex your budget without breaking the bank? Some rules:

• Throw a curveball. Always save a little extra each month into a curveball account. Aim to save 5% to 10% of your income. If that's too steep, do a regular savings sweep.


• Be a borrower. Think like the federal government: If you overspent on groceries by $100, postpone pampering or downsize the vice department to balance cashflow.


• Unspend. No Spend Days are powerful budget-balancing tools. By simply not spending one day a week, you give yourself more wiggle room in other areas.


• Cancel. You've heard it a mazillion times: cancel cable, cancel this, cancel that. Well?

Speak up
How do you flex your budget, but keep things on track? Or not? Add your two cents to the conversation.

Got Weddings to Attend?
Are there polite ways to ease the cost of being a wedding guest? Email us at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

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DailyWorth recently reviewed Spent. The following is an exclusive post by Cardella for our readers.

Sigh.
So often we focus on the dollars and cents necessary to get our financial life back on track—and fail to acknowledge the emotional currency required.

After years of struggling with a compulsive shopping disorder, I faced this issue when I had to grapple with my credit card debt. Obtaining the money to pay back my debts was one thing; creating a sustainable emotional budget was another.

No pain, no gain
I had been taxed by fear and loathing for far too long. I feared facing the numbers on my credit card statements, and loathed the idea of having to contact a credit-counseling agency.

I needed a strong dose of courage to help me take that first step and contact a credit counselor. I can’t remember how many times I picked up the phone, only to put it down without making the call.

Eventually, I did muscle-up some bravery and as soon as I heard the counselor’s voice, I knew I was doing the right thing.

I was carrying close to $9,000 in debt at that time, which may not sound monumental, but on my freelance writer’s salary, it was enormous. I wish I had budgeted more strength for the pain of revealing those cold, hard numbers to a total stranger—and for the bad news.

The counselor calculated that with payments of $175 a month, I could pay off most of my debt in forty-four months—nearly four years. I was stunned. It sounded like an eternity of paying for things that were probably gone, or never used. It took me while to cope with the shock.

As I adjusted, I realized that payback wasn’t going to be easy, and that I’d have to budget some stamina to stay with the program:

• Stop the shopping binges.
• Find healthier outlets.
• Live within my means.
• Make those monthly payments, without fail, for four years.

Humiliation was the next emotion that came up—one I wasn’t prepared to confront. When I received my contract for my payment schedule I felt the sting of having gotten in over my head with credit cards.

Now I also recognized that it was time for some budget cutbacks: I no longer could give myself the luxury of woe-is-me moments. I needed that energy to keep moving forward.

Instead, I focused on the windfall of extra energy that I got, as the relief slowly sank in. After years of high-priced denial, I was finally managing my debt—and my life. And being able to get a good night's sleep for a change went a long way toward restoring my emotional reserves.

Avis Cardella is the author of "Spent: Memoirs of a Shopping Addict."

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Money almost seemed like a fifth character in "Sex and the City"—always hovering in the background. So in honor of "SATC 2", out this week, we revived the old "which girl are you" game, and added a financial twist.

To play: Read the updated fiscal descriptions of our four heroines. Pick the one you identify with most. Then click on her name to get your full financial profile.

	Samantha Jones In business (and in bed), Samantha is a force of nature. She's aggressive, charming, confident and more than a tad self-absorbed—all of which are integral to her success as a self-made woman. She lives for the moment—and she can afford to, for now. Click here if you're like Samantha »
	Charlotte York Carrie once dubbed Charlotte a "Park Avenue Pollyanna", but Charlotte's conservative, sunnyside outlook is her strength. Not a financial or emotional risk-taker, Charlotte seeks security by playing by the rules as a wife and stay-at-home-mom. But is it safe to count on someone else? Click here if you're like Charlotte »
	Miranda Hobbes Money doesn't intimidate ambitious Miranda (it's her topsy-turvy emotional life that's a challenge). She was the first to buy an apartment; she wrestled with being a single, working mom. But independence has its limits. Click here if you're like Miranda »
	Carrie Bradshaw Aside from a brief episode of financial clarity (a moment of silence for the $40,000 in shoes), Carrie leads a charmed life of financial oblivion. Blessed with an improbable wardrobe and a Cinderella marriage to Mr. Big, Carrie doesn't worry about money because she doesn't have to. Or does she? Click here if you're like Carrie »

Samantha
You live for today, and why not? You've achieved many of the status symbols you craved—the clothes, the condo, the cachet of being a self-made CEO. Why think about the future when you're having fun now? Yes, you've saved and invested (you're too smart not to), but strangely, as much as you love to be in control, you've left your finances in someone else's well-paid hands. Is that wise? Not really. You've spent years building your business, now take some of that drive and sit down with your advisor to double check that you can take care of yourself.

Charlotte
You married for love—and security—and there is nothing wrong with that. A traditional lifestyle works for you; you love being a stay-at-home mom. But it's time you used those conservative instincts to be a little more self-protective. Buy yourself some free time to put a toe back in the art world. You supported yourself once; make sure you could do it again (if needed). Get involved in the family finances. You're an excellent domestic partner, now step up to the plate as a full financial partner. After all, you've weathered one divorce. You know it doesn't pay to put your head under the pillow.

Miranda
Money has never been an issue for you. You've got a top-notch stable income and you've always known how to manage your finances (stayed out of debt, saved for retirement, yawn). Now that you're married and a mom, you might want to expand your independent streak—and give yourself more "me" money. Make sure that you and your spouse are using the same playbook (you're part of a team now)—for your selves, the kids, your futures. You're a natural planner, but you need to take others' needs into account for your plans to come to fruition. And now that you've emerged from the turmoil of the last few years, use your money to give more to yourself.

Carrie
Maybe you were born under a lucky star, but even luck can ebb and flow. Despite your professional success and happy marriage (so far), you're stuck in 9th grade when it comes to money. It's time to grow up and capitalize on your innate good fortune—talent, connections, charm—and accept that no one hold the purse strings but you, babe. Read personal finance books, take a class, or subscribe to DailyWorth, but start absorbing more financial nutrients now. Taking financial control is the natural next step in your ongoing adventures. You'll wonder why you didn't do it sooner.

NOTES

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Sunscreen, flip flops and...
You want to relax on vacation. The trouble is, so does your budget. Here's how to make sure your trip doesn't turn into a fiscal fiasco.

1. Plan to spend. Most people have a ballpark figure for what a getaway will cost. Hint: That's not a budget. Use this detailed worksheet to break down your travel expenses.
   
   Putting numbers to your plans helps you to think through aspects of the trip you might have otherwise overlooked (taxis, beverages, water ski rentals), and double check prices, hidden costs, stuff you have to buy before you even get there, etc.


2. Adjust yourself. Once you have a basic tally, compare that to what you've saved. If your $500 camping trip is going to cost $750 with gas, tolls and park fees—or the family's trip to Europe just went up a few hundred because you all need new passports—adjust your budget.
   
   
   
   • Save more—it's only May 17th.
   
   
   • Look for discounts using Voyij.com, TravelZoo.com and Kayak's buzz feature for the best news on real-time deals.

Bottom line
You spend money on vacation so you can enjoy yourself—not come home to a big Visa hangover. Increase your short-term savings now to make sure you have enough. Share your travel deals and steals here.

Side question for entrepreneurs: How do you save for your quarterly taxes? Email us so we can include your tax tip in an upcoming DailyWorth.

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You know Kenia. She's a devoted DailyWorth reader (and commenter) who works as a systems engineer in California. Here, her get-out-of-student-loan-debt report.

In January, after three years of repaying my student loans—without much progress—my situation needed a closer look. I'd never added up my debts, but it was time to get serious:

• Loan 1: $684 @ 3.28% interest
• Loan 2: $19,081 @ 6.375% interest
• Loan 3: $29,563 @ 3.19% interest

Wowzers! I owed almost $49,000 in student loans. Panic set in: This could take years and years to pay off.

Building a bigger snowball
OK. Breathe. I'd read up on different debt strategies—and I decided to combine all of them into one massive debt attack. Here they are:

I started with the "snowball" strategy: i.e. once a debt is paid in full, you add its monthly payment (say, $100) to the next debt's payment ($125)—voila! A snowball of $225 per month. Once that loan is paid off, you take both payments and add them to the next debt, etc.

I combined snowballing with these other strategies:

1. Low-balance method: Tackle the loans with the lowest balance first. The reasoning: Rapidly paying off small debts keeps you motivated.
2. Avalanche method: Tackle the loans with the highest interest first. The reasoning: You save the most money over the life of the loans.
3. Biweekly payment: Make half a payment every two weeks instead of one monthly payment. The reasoning: By making 26 payments you end up with the equivalent of 13 monthly payments instead of 12—and you barely feel the pinch.

My Game Plan
It was time to throw the first snowball. I knocked out the $684 loan with my annual bonus from work. This was motivating and it felt great! I bragged to everyone how I got rid of one of my loans. One down, two to go...
Now for the avalanche! I took the payment for the $684 loan, and added it to the monthly payment on my highest-interest loan of $19,000 @ 6.375%.

Success!
According to my calculations, following the biweekly system alone would allow me to pay off the $19,000 loan in eight years, rather than 13—and the $29,500 loan would be paid off in 7.5 years, rather than 8.5.

But it gets even better: If I use the biweekly payment system plus snowballs and avalanches, I could pay off my $19,000 loan in only five years (down from 13), and my $29,500 loan in just six years (down from 8.5)!

And, I’ll be paying approximately $10,600 less in interest!

Thirteen years of debt? I don’t think so! I’m on my way to being student loan debt-free in just six years. You can apply these strategies to any type of debt—from credit cards to car and home loans. Tell me your debt reduction strategies and secrets.

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Mom would approve
Every year it sneaks up on you—Mother's Day (hint: May 9).

We'll leave the last-minute gift scramble to you (brunch? flowers? a... scarf??), and instead focus on this felicitous financial opportunity.

If you don't have a mini-budget for gifts, don't just sit there. Make one.

Coping with curveballs
We've covered the art of budgeting, but it's the mini-budgets within your budgie that keep it humming.

Think about it: Your rent or mortgage rarely changes. Your utilities are fairly consistent.

It's those erratic, holy-cow-it's-Mother's-Day expenses that (heh) do a number on you: home repairs, car repairs, kid expenses and... gifts.

Three ways to mini-budget:

1. Sock away fixed amounts for designated expenses (e.g. $20/week for gifts, $100/month for inevitable car repairs, etc.).
2. Or, calculate the yearly amount that you typically spend on a category, divide by 12, and save that each month (this is helpful for property taxes, tuition, and other semi-annual bills).
3. Contribute religiously to your curveball fund—at least 5% of your income—to cover all sporadic expenses.

Bottom line
Expect the unexpected, as they say, and build it into your budget.

Your move
Have you planned your summer budget, Ms. Pina Colada? Arrrrriba!

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Was ist los?
Last year a provocative study by researchers in Germany seemed to find a link between people who were deeply in debt and those who were obese.

According to this ABC News report: "Taking other factors into account, the authors found that overindebtedness… nearly doubled the risk of being overweight."

Not surprisingly, the study was met with scorn and skepticism on both sides of the Atlantic.

But that doesn't mean we shouldn't pay attention to it.

Did the chicken buy or eat the egg?
This study wasn't suggesting that one state causes the other—i.e. that fat people overspend, or overspending makes you fat—although many people interpreted it that way.

The more interesting point, buried in the hoopla, was the idea that our consumption habits—whether related to eating or spending—may be indeed be connected, as Amanda explored here.

Bottom line
Mondays are Budget days in the DailyWorth universe, and we believe (firmly) that your budget (and ours) will benefit from soul-searching, as well as number crunching.

What do you think? Is there a connection between eating and spending? We don't mean that going to the mall might make you more likely to stop in the food court and eat fries (although someone should really study that risk, too). The question is more whether the ability to moderate one's appetite—for stuff or food—is somehow related.

Share your thoughts »

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Jacquette M. Timmons is the author of "Financial Intimacy: How to Create a Healthy Relationship with Your Money and Your Mate," and founder/CEO of Sterling Investment Management, Inc., an investment education and financial coaching firm.

When budgets lie
I don't believe in traditional budgets, and here's why.

Whenever I teach a financial workshop, I ask participants, "Raise your hand if you know how much money you spent last year and on what items?” Very few people raise their hands. And that's precisely why budgets don't work.

Budgets aren’t about numbers—they are about patterns and choices. Few people are aware of their true spending patterns, thus their efforts to live by a budget often fail.

What most people really need: a pre-budget.

Before you build a budget

1. Get to the truth about your money habits. Track your spending—with a notebook, spreadsheet or software—for 90 days, uncensored. Don't just focus on your bank and credit card statements: Analyze your cash spending, too.
2. Ask yourself: “Does my spending reflect my priorities? Where do I want to make adjustments?”
3. Use the pre-budgeting period to compare your financial ideals to the reality of how you handle money. How might you construct a budget based on your strengths as well as your weaknesses?

Maybe you're a great saver, but a frivolous or emotional spender. Maybe you're disciplined on weekends, when spending risks run high—but you're careless during the week.

Bottom line
The 90-day pre-budget system gives you a reality-based foundation for your financial plan—which is why it has a higher stick-to-it success rate. Tell us how you plan to rebuild your budget.

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When spending heats up
Warm weather seems to sweat the cash right out of your wallet. At least during the winter holidays, you get constant reminders to watch your budget.

All you hear now is that inner voice: "But I need a..."; "We should go to..."; "There's a picnic at..."; "OMG, my roots/nails/bikini..."

Solution: Build a quick summer budget right now.

Summer fun
Step 1: Take out a calendar, and list all upcoming summer expenses. Examples:

• Events: from weddings to conferences to, oops, your sister is due in September, so the baby shower will be in August.
• Repairs: from repainting your deck to fixing the kiddie pool.
• Travel: long weekends, family reunions, vacations and guests!
• Looking hot. You know you want to. So plan for it.

Step 2: Build a ballpark budget. What's the rough tab for three long weekends, a new beach umbrella, a cuter haircut, new swim suits for the kids, etc.? Use PearBudget's 30-day free trial—it's super simple (almost fun!). You may even want to subscribe (just $3/month).

Step 3: Plan ahead. If you're using our Save-to-Spend budget, you can cull some cash from your curveball fund or your fun money. Otherwise, set up a small summer saving account now, to offset costs.

Bottom line
Hose down the lawn chairs and chill out. With a ballpark summer budget, your spending won't get too hot to handle—and you'll stay on top of other goals. Which is good. We have BIG plans for you this year.

How does your summer budget look? Share it!

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Starting this Wednesday, personal finance advisor Galia Gichon is teaching a four-week teleclass for entrepreneurs. Use the code DAILYWORTH to get a 25% discount—and enjoy some of Galia's tips here.

Meeting your financial goals when you're self-employed can be tough—especially if your income is erratic.

Here's a WEEKLY exercise to help you get a grip on cash flow. If you have a life partner with whom you co-manage your finances, we suggest that you do it together.

Write down the following: How much is in your checking and savings accounts right now? What income do you expect to earn in the next 3 months? What are your monthly bills (including regular and irregular upcoming expenses) for the next 3 months?

By writing these numbers down each week, you'll gain clarity into the dynamics of your cash flow (got a white board?). The more you can anticipate dips, the more time you have to either earn more or cut spending.

How do you manage erratic cash flow?

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A post last week on the "Save-to-Spend" budget sparked numerous questions from readers.

Here, our best answers:

My monthly income is so low I can barely pay the bills. How can I budget to save?
Don't think of the saving part of your budget as a loss (as in: "I don't have the money"); think of it as a gain. When you're broke, squirreling away even the spare change at the bottom of your purse is a plus. Establishing the habit is more important than the amount, for now. Even a few bucks stashed away builds optimism.

I'm a freelancer and my income is erratic. How can I set up a regular budget like this?
Your bills are monthly, even if your income isn't. Start there. What's your monthly total for basic living expenses? Let's say it's $2,000 for housing, utilities, food, etc. Aim to save a percentage of that (e.g. 5% = $100) in each budget category, or aim to save a percentage of each freelance paycheck.

How do you set up savings for four different categories? Do I need four different accounts?
The value of having separate accounts is that you're less likely to abscond with your own money. If you earmark the funds in each account for that purpose, you won't spend the money until that specific need arises.

I live in an area of the country with higher-than-average housing costs. I don't think this budget makes sense.
The save-to-spend system is based on target amounts. If your basic living expenses are more like 65%, adjust accordingly (or scale back).

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Weekends are hard on the ol' budget—especially if you don't have one. To get your spending and saving in synch, try this stress-free method, created by Galia Gichon, financial planner and author of the "My Money Matters" kit.

To make things even simpler, we took Galia's Spending Smarter Plan and turned it into a Google Template. Access it by clicking here (you'll need a Google account if you don't have one), and click the "Use this template" button in the top left to begin adding your own numbers. Just highlight the sample numbers, and write-in your own as-accurate-as-possible amounts.



The Spending Smarter Plan is courtesy of DailyWorth regular contributor Galia Gichon, MBA, a financial planner in New York and author of the "My Money Matters Kit," and founder of Down-to-Earth Finance. Check out her classes and podcasts!

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The reason budgets fail—or people never try them in the first place—is that the budgeting concept is misunderstood.

Many people believe (or pray) that a budget will solve many of their money problems. A budget is really more like a blueprint: it consists of guidelines of how to build a better financial life. The rest is up to you.

The trick to successful budgeting is to find one that fits your skills, goals and financial style. To find your best budget, take this short quiz:

1. I need a budget that will help me:

   a. Cut back my spending
   b. Learn where my money is going
   c. Achieve a goal
   (e.g. pay off debt, create emergency savings)
   d. All of the above

2. I would describe my money style as:

   a. Detail-oriented - I'm a "to the penny" person
   b. Loose - I'm all about the big picture
   c. Schizophrenic - I keep tabs for a month, then drop the ball
   

3. When it comes to technology:

   a. I suck. I'm so analog I can barely text
   b. I'm a geek, an early adapter of any new whizbang app
   c. I'm competent, but not super-comfortable
   

Get Your Score!

There is no score for question one, but your answer is important. After you arrive at your score below, knowing the intended purpose of your spending plan will help you pick the right match. a = 10; b = 5; c = 0 a = 0; b = 10; c = 5

Your Score: 0-5 – You broke a sweat just taking the quiz. Try this easy-does-it plan. 10- 15 – You'd like to get a grip on your money, but you don't want to watch every dime. In short, you're a good match for one of the many, user-friendly money management Websites. Test-drive one or two to find one you like best fit. We like Mint, Thrive, and Wesabe. 15 – 20 — You have serious CFO tendencies, which can be a blessing—or a curse if you don't have a budget that caters to your inner control freak. 400 people love the Family Budget Planner on Google Docs. {6/1/10 update: Google removed the spreadsheet, so here's another link: http://www.vertex42.com/ExcelTemplates/family-budget-planner.html}

How do you make your budget work for you? Tell us:

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If you dread the B word and wish you could manage your money without brown-bagging your lunch or fretting about your heating bill, maybe you can—and maybe you should.

The cutbacks and micromanaging that drive conventional budgets steer people in the wrong direction, argues financial planner Michael Rubin, author of "Beyond Paycheck to Paycheck." My two favorite points from his anti-budget post on Mint.com:

1. Think big. Slicing and dicing your daily expenses won't save as much as reining in big-ticket items, e.g. your home, car, commute, or (for many of us gals) clothes, accessories, grooming. Imagine a smaller mortgage that saves you $300 a month, or ditching your gym membership and saving $600 a year.
   
   
2. Budget your savings. Rather than monitoring what you spend, focus on saving more—kick up your 401k contributions, sock away more in your emergency fund. "If you're saving 15% of your income, who cares what you do with the other 85%?" asks Rubin.

Rubin is right. In "The Two-Income Trap," a groundbreaking analysis of why many middle-class Americans go broke, authors Elizabeth Warren and Amelia Tyagi make the same point. An affordable life doesn't require skimping on lattes, but it does require a reexamination of your overall lifestyle.

What makes it easier to live within your means, without the constant discomfort of a belt that's too darn tight? Oddly enough, in the physics of personal finance, saving is what balances the equation. Pushing yourself to save more, and save first, soon creates a de facto budget that inspires you to spend less and make smarter choices—but without feeling there's a noose, or a spreadsheet strangling your life.

Try it. You'll like it.

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It's Halloween. Soon Thanksgiving. And then the holidays. Are your wallet and filing cabinet ready?

Here are four questions to ask yourself as the end of 2009 approaches:

• What gifts do you have to buy, how much will you spend, and is the cash available? Make a list--and if necessary make tough choices now. Remember, frugal is the new black. Friends and family might welcome a tactful discussion about scaling back.
  
  
• In January, you'll need to gather your financials to prepare your taxes. Is everything in order? Would an extra 30 minutes per weekend between now and then make it so?
  
  
• If you're self-employed, and haven't paid your quarterly estimated taxes, you might owe money to Uncle Sam. Do you have it? If not, April is six months away; Start stashing now.
  
  
• Your favorite charities will soon begin asking for end-of-year donations. Who will you give to, and how much? We adore Women for Women International. For $29 a month, you can provide financial support to women survivors of war in countries like the Congo and Afghanistan.

Now, take a deep breath, and pat yourself on the back. It's not quite November, and you're already more in control than you were five minutes ago.

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Mikelann Valterra is the director of the Women's Earning Institute, a money coach, prosperity teacher, speaker and published author.

Did I Spend Too Much?
My little sister is getting married in November and we are in high wedding gear. As the sister of the bride, there is plenty to keep me busy. It’s fun, and daunting too. Luckily, my sister is a born planner and has it all under control.

She’s had two bridal showers—one for the family and one for close friends. I bought a “safe” bridal shower gift for the first one. For her second shower, I found myself wandering through the Love Pantry, looking for something a bit more… well, you know. Let’s just say that I found something that crosses the Kama Sutra with a deck of cards… oh- and edible body frosting… Yum.

Now why do I share this with you? Well, in my practice of “radical financial clarity”, I was sitting down the day after her second shower working on my money. It was only the second week of October. But goodness, the month is adding up quickly. What can I say—I spent more than I intended, AND I have no regrets.

Real Time, Right Now, Not Later
“Radical financial clarity” means, among other things, to get in REAL TIME with your money. Many people look at their money after it is all spent. They sit down and analyze their credit card statements or they look at on-line banking and see where all the money went last month. While this can be helpful, sometimes it is depressing. (“Oh, look how much I spent… wow.”) The money is already gone!

Being in real time means knowing where your money is going right now and having a flexible plan based on what is happening. Believe it or not, I always know how much money I am going to have at the end of the month. How? I create a spending plan for each month and then I begin to adjust it once the month is under way. This I what I teach my clients to do.

For example, when I sat down over the weekend and looked at where I was in October, at first I was frustrated. I spent more than I intended to on the bridal shower gifts. But I wouldn’t change it. Then I realized I had to make another adjustment for how much my bride’s maid dress alteration was going to cost me. (Yeah, yeah, I’m sure I’ll wear it again with more alterations…) Oh—and my car’s rear window defrost isn’t working. Lovely. But I have a method of looking at this in REAL TIME and making on-the-fly adjustments.

The bottom line is: I decided to wait on ordering the rest of my window blinds for my kitchen until November. I also called a friend and said “let’s eat dinner at my house before we hit the play next week”. She was thrilled!

Just 5 Minutes a Day
Practicing radical financial clarity does take time:

• I spend about five minutes a day on my money, simply tracking what is happening.
  
• Once a week I really look and think about it. Given how much I work for my money, though, what is five minutes? I do find it strange that some people work 40 to 60 hours a week for money and then say they don’t have any time to manage it. Are you guilty of this?

Learning to spend time on your money is one of the biggest lessons I impart to my clients. As a money coach, I work with professional women who want to heal their relationship to money. I teach them how to escape the clutches of the money fog and feel more in control of their finances. Sounds wonderful right? Yes, it is. It’s truly amazing work.

But here is the catch. My clients, just like me, have to spend time on their money. It’s not just what they do with me in session—my clients learn how to stay on top of their money in-between and after our sessions. In the beginning, I am right in there with them, looking at accounts, talking about how they track, helping them plan, and providing an accountability element to their actions. Over time, we move to a higher and deeper level with their finances. But one of the first things they learn is that they must spend time on their finances. The payoff is less financial stress, more peace and a feeling of being in control of your life.

I’m as busy as anyone out there. Yet I can find five minutes a day to pay attention to my money. After all, I just worked eight hours to acquire some of it! What’s five minutes to look at it? You can do this too.

It's Not About Being Perfect
Learning to manage money is not about learning to be perfect with all your money choices. We’re all doing the best we can. And we can’t predict everything that happens. When you find the perfect Kama Sutra bridal shower gift, buy it! But knowing that you have a way of balancing out the rest of the month is a beautiful thing indeed. Less stress and more satisfaction is the name of the game.

Great ... So Now What?
If you read this and don’t know what to do with your “money management” time, you are NOT alone. Many professionals don’t know how to “manage” their money. Just know that help is available. I’m on the faculty of the Financial Recovery Counseling Institute, so in addition to my own money coaching private practice I train new money coaches throughout the world. If I’m not the money coach for you, I can find someone who is.

Mikelann Valterra is the director of the Women's Earning Institute, a money coach, prosperity teacher, speaker and published author.

 

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A DailyWorth member recently asked us:

For the first time in years, I've paid my bills, paid off my credit card, and have a $2,000 cash surplus! I have an $80,000 HELOC (Home Equity Line of Credit), and I'd really like to fund my Roth IRA. Should I put all $2,000 into my HELOC, or distribute it across both the HELOC and my Roth IRA?

DailyWorth contributor and personal finance expert Galia Gichon offers the following:

Galia's Advice
I've always been a big fan of moderation. I think it's okay, for example, to have a few glasses of wine a week or a small piece of chocolate every night. The same principle applies to your money. Before we begin allocating that $2,000, answer one question: Do you have an emergency savings account of at least six months worth of expenses? If not, here's what I recommend:

• $1,000 in your savings account. What if you lose your job? The more you have in reserve, the better you'll sleep at night.
• $500 towards paying off your HELOC. Interest rates are very low right now but inflation will catch up with us and start raising rates fairly soon.  That includes your HELOC, which is most likely not fixed.
• $450 towards your Roth IRA.
• $50 toward something fun in the stores. You deserve a treat, and we do need to stimulate our economy!

The dollar amounts don’t matter so much. The idea is that you can meet many of your goals with one chunk of change.  

Learn more about Galia Gichon, her advisory practice, and her SIMPLY MONEY classes at DowntoEarthFinance.com.

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