What is the best method to budget?

posheak

We all I guess need to know how to budget but, short of counting every penny and what it is spent on, I' d like to know of a system or method that works well in getting control of personal finances. Let me know what works for you?
These are the 2 things I think are most important when doing a budget and tracking your spending:
- That you actually do it.
- That you really keep track of the total amount of money you spend.

In a perfect world, you'd keep track of where every penny is spent. But that isn't always practical. One thing I used to do was carry a small coin purse that was separate from my regular wallet which was for my "pocket money." Once in awhile, I'd stick $20 in my coin purse, and record the $20 under the "pocket money" column on my budget spreadsheet. Then, I was free to spend that money without having to account for every penny. So, if I went shopping during the holidays and decided to stick a dollar in the Salvation Army kettle, or if I ran to the drug store for some cough drops, I didn't have to write the amounts down. The key to this system is to make sure that the amount of "pocket money" you allow yourself is reasonable.