There are online tools and software for budgeting which are more sophisticated than using paper and pencil or a spreadsheet. But, to be fair, lets cover all your options and see which one offers the fit for you.

Paper and Pencil Budget

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The paper and pencil budget is exactly what it sounds like; you write down your income and expenses. For example, your income is $1000 and your spouse brings home $1500 for a total of $2500. When you write down your expenses, you can create categories or not – it really just depends on what budget system you are using. The goal here is to make sure you are not spending more than you are making.

To make things more interesting also write down goals for yourself. Write down your spending categories and see how much you are spending or saving in each category. You may also have goals for these categories as well. Perhaps your lunch goal is $100 for the month. Keep track of lunch expenses to see if you are meeting that goal.  Or, better yet, cut it down some to help you increase spending (or savings) in the right areas.


Excel spreadsheets are just a step above using paper and pencil. The spreadsheet is a little easier to keep track of and make changes to. You might want to start with paper and pencil and then move on to spreadsheet it will be less overwhelming. Find information on using a couple spreadsheet budgets and download them for free here.

Online Tools and Apps

There are fancy tools out there that can do much more than paper and pencils and spreadsheets. If you are COMPLETELY comfortable with online with banking, you can use an online tool.

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These online tools allow you to connect every bank account, credit card and other miscellaneous accounts and display them in one place. To connect your accounts you will have to provide your user name and password for each one. It can be a little scary for people having all this information in one place.

Since they are online you can access your profile from anywhere. Most of these tools will also auto categorize your spending as well. You can find online tools that charge a fee and some that are free. Try not to overwhelm yourself, but some of the paid systems offer a free trail – so you can try them all.

Some paid online tools that are very popular are:

Free Online tools

The free options are great – even if you change to something paid later, they are a good place to start.

Be sure to check where the software categorizes charges. You might have to do some maintenance work on the entries, but this is not a difficult task. Software is supposed to make a manual process easier. Therefore, work on a paper and pencil budget then switch to an online tool.

Paid Online Tools

You Need a Budget (YNAB) is a great system but there is a cost. However, YNAB offers a free trial so try this out and if you like it, it is worth the investment.

A great alternative to YNAB is Personal Capital. Personal Capital is more than a simple budgeting system – it is a financial management platform. You can get snap shots of net worth and even how much brokerage fees are costing you. The platform is award winning and they have over 1.1 million registered users. Personal Capital will also let you know if you are on track with your financial plan. Definitely check this one out.

Why would you use a paid system over a free one? Honestly, you don’t have to. The free apps will work just fine. But like anything free they are usually not as feature rich as the ones that charge. If you feel overwhelmed, just stick with a spreadsheet or even paper and pencil.

Budgeting Software

Budgeting Software is extremely powerful. One tool will often have many more features that you need for one single task. But, that does not mean it is not worth the investments.

These tools are installed locally on your computer and/or mobile device. The downside to these applications is the cost and having to download it to a specific pc. That means it does not necessarily travel everywhere. Like the online tools, try to use a paper and pencil budget before jumping right in to one of these robust tools.

Quicken is a trusted name with a great history and is available for both (Quicken for PC) and (Quicken for Mac).

The Purpose of This Article

The purpose of this post is to attempt to put you on the right track with budgets. No systems will be perfect for everyone so just see which offers what you need. Until you decide to make a purchase, spreadsheets offers a quick and convenient system and the free apps are… free. You can carry the spreadsheet around with you on a flash drive without having to installing full-blown programs on different computers. You also don’t have to worry about having your information out on the internet. As long as the device you are using has office compatible software installed you should not have a problem launching your budget.