If you put together a budget, it’ll help you spend less, spend more wisely, and save money. When you’re ready to get serious and organize your finances, the first thing you’ll want to do is figure out where your money is going, and then where it should be going. The easiest way to go about this is by using a budget calculator. There are a variety to choose from online, but if you don’t use one that performs optimally, you’ll get frustrated when you can’t create a customized budget to make it a helpful tool.
Here are some tips to look for when choosing an online budget calculator:
Use a Calculator that Syncs with Your Accounts
If you use a calculator that will sync with your bank and credit card accounts, it’ll save you a ton of time inputting data you’ll need to use while budgeting and as you spend money. After you enter your information, you should be able to see the balances of each account, as well as your credit card interest rates. Some calculators even allow you to enter rewards information, to help you keep track of your benefits.
Use a Calculator that Shows You Percentages by Category
It’s a good idea to use a calculator that shows you your categorical spending in percentages, as well as dollar amounts, as a way to put your priorities into perspective. For instance, if you’re wondering where all your money is going every week, and you see your that 40 percent of your income is spent on rent and 30 percent is spent on skiing, it may inspire you to make a couple of lifestyle adjustments.
Use a Calculator with an Exhaustive Number of Categories
Some calculators allow you to create your own spending categories, but it might be better to use one that provides the categories for you. This is especially true for items that seem to fit into several categories at once, which can make organization overwhelming and time consuming if you’re trying to create it on your own. With all the categories in front of you and (depending on your calculator) populated, it’s easy to see where you’re putting your money.
Use a Calculator that Allows You to Make Goals and Tells You Where You Can Save
Your calculator should allow you to set budgeting goals every month and see your progress on sticking to those goals over time, whether it’s in a graph or chart form. If you’re constantly running over your budget in a certain category, it’s important to figure out if you need to allocate more funds to that category OR if you need to make some adjustments in your lifestyle to stay under budget. A good calculator will also be able to do a brief analysis of your spending and make recommendations for goals to adopt. For instance, if a large portion of your spending ends up going to restaurants, your calculator can alert you to this and recommend you cut back a bit.
Use a Calculator that Allows Your Budgeted Amounts to Roll Over
If you come in under budget in a certain category, a good budgeting calculator will give you the option to roll the remainder of the budgeted money over to the next month. This can be really helpful when you’re trying to save for a large future expense. For example, if you’re purposefully cutting back on entertainment one month to buy tickets to an event the next, your calculator should not start with the same budgeted amount the next month. Instead, it should allow you to spend the leftover money in addition to that which is already budgeted.
Use a Calculator that Compares You to an Average
Some calculators compare the amount you spend on average in each category to the amount the average person spends in that category. This is helpful because you might be unaware that you are spending a much higher amount on, say, a phone service, than the average person. If this becomes apparent, it might pay to investigate why.
Everyone has different needs when it comes to budgeting, so it’s important to have a calculator you can personalize. If you need more customization or have questions on how to create a more in-depth budget, contact Fundamental Finance Academy. We are more than happy to help you structure your present spending and set you up with a budgeting plan for the future.