Use BudgetSketch To Make A Household Budget That Works

Anyone who knows me very well knows that I can be a little bit obsessed when it comes to finances. It isn’t good enough to earn enough income to pay the bills – I want to be able to plan out our family’s financial future. I want to make a household budget that works in terms of our goals – such as buying a new car in a year or taking a major family vacation in three years.

Here on MakeUseOf, I’ve explored several tools you can use to track your finances such as the SimpleD Budget Tracker or Quicken Online. I’ve even offered some of my personal secrets on how to pay down your debt a lot faster by creating a few simple Excel worksheets. While these tools are excellent for tracking your spending habits and trying to figure out where all of your money is going, it isn’t a simple matter to try to plan out and organize future spending – and planning out your spending is what having a good budget is all about.

So, today I’m going to share another powerful, collaborative budgeting tool called BudgetSketch that you can use with your spouse or significant other to make a household budget and plan where your money is going to go in the future.

Make a Household Budget With the Future in Mind

Planning. That’s what every good household budget is about. However, when you’re married or living with someone, it’s also about co-operation and teamwork. You can keep your own private Excel spreadsheet with your facts and figures all you like, but unless everyone in the household is on board with the overall financial plan – you can expect failure.

What I’m going to cover in this article is an impressive collaborative budgeting tool that lets you plan out your spending moving forward, not dwell on the mountains of cash you’ve wasted in the past. The motto of this free software app is to “Get Intentional With Your Money.”  The theory is that instead of reacting to your overspending with guilt, disgust or depression, you instead stand up and make it clear how you intend to spend your money from today moving forward. This software will help you base those intentions on reality.

The first thing you’ll notice when you first sign up for your free account is that you’re offered a very cool, free household budget worksheet in PDF format.

Before you even get started, the makers of this online household budgeting software suggest that you pull together all of your documentation from credit cards and bank statements and fill out this entire spreadsheet with your bills and debt. If you’re clueless at this point, then you might consider using one of the tracking tools I’ve covered earlier.

However, if you know what you spend but you’re not sure how to organize your spending and your savings, then fill out this sheet as best you can and then open up your account.

The first thing you’ll notice is how insanely simple the software is. You just add an expense or income, and use the simple form shown above to describe the amount and when it’s typically due. If there’s no fixed due date, then just estimate. If it’s a credit card bill or car loan, select the debt checkbox.

Once you’ve filled out enough of your income and expenses, you’ll quickly see how this particular household budgeting system works. The bills are laid out for the month in a visual 4-week layout that shows you your weekly income and expenses from week to week.

When you scroll down to the bottom of the screen you’ll find the magic that makes this system work for so many people.  One of the things that the majority of folks fail with a budget is that they create the budget on a monthly basis. However, it’s human nature after receiving a large paycheck to assume that there’s plenty of money for dining out, movies and more.

But, as you can see from the weekly layout above, the software shows you the positive cashflow from week to week. This is an amount that you must have left in the bank at the end of the week or your budget won’t work the following week . As you can see above, week two requires so many expenses (and no income) that the cash flow for that week is far less. Spend too much in week one and you’re in big trouble come week two.

The part of this online application that I like the most is goal planning. When you’re done laying out your household bills and expenses, then you can start adding goals. This could be either paying off debts or saving up for a car or a vacation (or any other dreams you may have).

Each month that you see a positive cash flow, you can click on the “Apply Surplus to Goals” tab, and the system will ask you which goal you’d like to apply your surplus to and what amount. The theory of this particular budgeting system is called a zero balance budget. This means that you outline exactly where every penny is going to go. This can make it difficult to deal with surprises – but then again a financially savvy person should have a goal to save up an “emergency” fund so that surprises like hospital bills or car repairs don’t destroy your budget.

Of course, my favorite part of this online application is that it’s collaborative in nature. Husbands and wives or even college roomates can all throw their heads together and use this software to plan out a solid monthly budget that works for everyone. This online software is the perfect way to make a household budget that everyone can agree on, because the expenses are clear, and so are the goals and dreams that your money is going toward.

Do you know of any other online tools or tricks to collaborate on making a household budget? What methods do you use to plan out your paycheck? Share your experiences and insight in the comment section below.