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Warm and fuzzy budgeting

Me: “Hey, Art of Simple readers! We’re going to be talking about money.”
You: “Yay, money!”
Me: “We’re going to start off talking about … get excited … budgets!”
You: *yawn*

I know, I know. Too often, budgets are the boring uncle at the cocktail party of your financial life. But it doesn’t have to be that way. Stick with me on this one. It’ll be worth it.

Most budgeting articles give you a few rules about how to budget, tools to use, and other specifics about managing a budget. There’s something else they heap on, as well: a crushing sense of guilt. They rely on a vague sense of dread you have, that you “should” be budgeting. They build up budgeting as this thing you should slog through — with a mindset of fear and from a standpoint of scarcity.

I want to propose a new approach to budgeting — one of hope and promise, something I call “the warm and fuzzy side of budgeting.” But we’re not going to actually tackle the specifics of setting up a budget (although Tsh is covering that soon).

This post is all about the background of why a budget matters, and why you’d want to spend half an hour of your week looking at a bunch of numbers.

I’m going to lay it all out for you. Right now. And, since you’re reading this on Simple Mom, I’m going to do my best to make this really … simple.

So … what is a budget, anyway?

Good question! We’ll talk about budgets in a second. First, though, let’s talk about you.

You have things that matter to you. Hopes, and goals, and dreams. This is going to sound cheesy, but I think it’s true: Your budget is simply your hopes, and goals, and dreams … on paper. It’s nothing more than you saying “this thing in my life is more important than this other thing,” and then putting money towards the important things.

As Tsh says, you need to find your why. Once you know who you are, you can make a budget. Once you have a budget, you’ll begin to see patterns in your life and the daily decisions you’re making. And once you begin noticing those patterns, you’ll begin to change the way you live, in ways that help you realize the goals you have for yourself and your family.

“That’s nice,” you say, “but I’m still not totally sure what a budget is.
Fair enough.

The Three Essential Parts of a Budget

A budget is made up of three things that work together:

  1. a plan of what you want (or may need) to spend (the future)
  2. a record of what you’ve already spent (the past)
  3. a statement of what’s available to spend right now (the present)

That’s it. Pretty simple. There’s more that budgets can do, with spending categories and whatnot, but those three things are the essential bits. Unless your budget has all three parts, it’s not going to do you any real good. You need to have a picture of the future, past, and present in order to make good decisions. And a budget is pointless unless it changes your behavior — the way you’re actually spending money.

Speaking of that… let’s take a non-judgmental look at the way you spend money.

The Three Circles of Spending

An art installation, showing three large rings standing in a field.
Photo by Suzie Tremmel

There’s something I like to call “The Three Circles of Spending” — there’s how you want to spend money, there’s how you think you spend money, and then, sadly, there’s how you actually spend money. And the truth is, they probably don’t line up very well.

Quick (totally hypothetical) example: You want to spend around $100 dining out this month. Before the month begins, you think you’ll actually spend around $120. But at the end of the month, you look back at all of your dining out receipts, and you’ve actually spent close to $200. Yikes!

A budget’s job is to help those three circles overlap more and more over time.

People often shy away from budgeting because “a budget’s just going to tell me that I can’t get my latte at Starbucks every day.” But if that latte matters to you, then you should buy it. Every day. With my blessing. Just recognize that you’ll have to make some compromises to make that work. A budget doesn’t tell you to buy less of the stuff you want. It tells you to buy more of the stuff that matters.

A few final principles to keep in mind

Regardless of how you budget (cash in envelopes, pen and paper, Excel, other computer software), there are some principles you’ll want to follow:

1. Own your priorities.

There are things in your life that matter. To you. These are the things that you should be putting your money towards. And if you find that you don’t have money at the end of the month to put towards them, think back to the Three Circles.

If you aren’t making enough money, there are other issues at work, but you still need to know what your priorities are. Know where you want your money to go.

2. Own your choices.

You get to make decisions every day about where your money’s going to go. Sometimes, you don’t have a lot of control over it. But in many cases, it’s totally up to you. Be intentional about your spending.

3. See your budget as the bridge between your long-term goals and your daily decisions.

You need to have a macro-level vision — your priorities. You need to make micro-level choices on a day-to-day basis. Your budget is the thing that sits squarely between them, allowing you to make easy decisions in your day-to-day spending, with each one getting you closer to those hopes, goals, and dreams.

I know this article’s a bit different from typical budgeting articles. In the comments, I’d love to hear from you — where are the areas where you have the most pressing questions about budgeting? What’s confusing about what I’ve laid out here? Please post anything on your mind, and I’ll respond, either in the comments, or in another post down the road.

Reading Time:

4 minutes





  1. Angela @ Homegrown Mom

    I would be interested in hearing about handling finances as a couple when you have very different ideas about money, and about working together on a budget, and how a wife can be supportive and helpful in this area!

    • Charlie Park

      Thanks, Angela. The question of “how to talk with my spouse about money” is a great one. Hopefully, we’ll be able to tackle that one a little later on (maybe I’ll team up with Corey on that one!)

      One thing that’s good about budgeting as a couple is that when you’re planning it, it gives the two of you an opportunity to talk about what your goals are, and to really clarify where you think spending money is important. (And, yes, finding compromises is a part of it.) And when you’re in the month, it gives you a “third party” that you’re both answerable to — it gives you an opportunity to work together within the constraints you’ve established together, rather than working against one another and the (sometimes wildly) different “constraints” you have in your heads.

    • Desiree Fawn

      Oh yes, I need help with this too… I’m trying to be a saver and we’ve run into a lot of conflict about where the money should go. It’s frustrating and I’d love some insight!

  2. Marcia Francois, Organising Queen

    Well, Charlie, this is the best fuzzy post I’ve ever read 🙂

    I love how you explained about being intentional about your spending choices.

    And the 3 circles of spending is a great visual – so we want to make a Venn diagram with the 3 and find good middle ground, right?

    • Charlie Park


      On the Venn diagram — exactly. In an ideal scenario, those three circles would overlap completely … but this is the real world, and it’s pretty unlikely that we’d have our act together that we’d have them all line up perfectly.

      As Tsh said a few years back (The Basics Behind a Budget That Works), a good budget is really more like a series of budgets, made new each month. So the circles will wobble around, and some months will be wildly out-of-whack. But the goal is that, over time, the amount that you actually spend (in the present) and the amount that you think you’ll spend (based off the past) will line up with what you want to spend (your goals for the future).

  3. mbb.

    as an engaged woman i found this incredibly helpful. my future husband and i are working to figure out how to budget in a way that works for us – your explanation has gone a long way to helping me understand the guilt factor attached – and why it’s totally unnecessary! thanks.

  4. Candace

    Wow, this is what I’ve been missing. I have a budget, and I love to use it. I often use it, though, to guilt myself into saving more, but to use it to remind myself to buy stuff that matters in order to get to my *why* that Tsh talked about the other day–what a positive way to look at it!

  5. Jodie

    LOVE the 3 circles visual… we’re new to budgeting (pathetic!!) and i’ve been really struggling with it. i’m tempted to print out 3 circles and hang them on the wall in the kitchen as a daily reminder. also love the idea of being intentional… good stuff!

  6. LobotoME {goods to keep ME sane}

    Great post Charlie! In our house we call it a SPENDING PLAN. Because that somehow sounds better to me than Budget but same concept. We have this much coming in, this much going out (mortgage, savings, etc.) and this month available for misc/fun. Once its gone its supposed to be gone (but isn’t always…oops). Anyway, great post, I’ll be sure to pass it along. Cheers, Jenny

  7. Hillary

    Great article. I am a single mom with 2 kids. Therefore money is not only tight, it’s TIGHT. One goal I have is to try to save $5 a week and even that is hard.
    How do you plan a budget when everything you buy is essential?

    • Lauren

      Pay yourself first! Have that $5 (or whatever amount) withdrawn from your paycheck or moved from your checking automatically. I am certain – after much trial and error on my own part – that this is the only way. And after a few weeks, you adjust and don’t even notice that money is “missing.”

      • Chris

        Totally agree with Lauren. Through my husband’s employer, we can have the money deposited into multiple accounts. We have $100/paycheck (so $50/week) put into savings. The only way to access that money for us is withdrawal or transfer, so it has to be a very deliberate decision for us. Although money is not as tight for us, we too went through an adjustment when we suddenly had “less” money. We eventually adjusted though, and it has always been very reinforcing to see that savings acct number keep climbing. It may sound silly, but start at $1 if you need to and work up.

  8. Lauren

    Thank you for putting this concept into words. Whenever my husband and I disagree over money, it is because our first and second circles don’t match up. The more we can get our individual ‘want’ and ‘think’ circles to line up, the less we argue.
    I’m going to share this article with him in hopes that it will aid us in finding compromise on more and more of our priorities.

  9. SBM

    I’m with Hillary – as a single mom every penny counts and taking on a second or third job is impossible (no family around to watch the kids). I have a “good” job but every month live paycheck to paycheck. Few if any articles on personal finance, budgets, etc address this problem. Instead, the authors seem to assume that all families are dual-income ones.

  10. Charlie Park

    To Hillary, and SBM, and any other single mothers — your questions are good, and valid, and I know your road is hard, and that few articles address the situation you’re in. And the truth is that even when a family is on a single income but there are two parents, they have time and energy they can use to split duties around the home and not go crazy.

    If any other readers have suggestions or articles they can point to, I know a number of others here would appreciate it.

    One quick tip I have is that if you’re eligible for the Women, Infants, and Children program, you should absolutely sign up for it. We’ve used it in the past, and it’s been very helpful.

    I’d love to explore this area some more … does anybody else have any resources or suggestions specific to single parents they can offer?

  11. Tsh

    I know it feels counter-intuitive to spend more money on something when you’re in search of help to find an extra dollar to put towards savings, but I was truly surprised how much insight I got when I was a member of Dave Ramsey’s My Total Money Makeover forums. People there are budget fanatics, and they help everyone (willing to post their budgets) find holes in order to save more cash.

    Sometimes you just need an extra set of eyes to see what maybe you can no longer see (too close to the trees to see the forest…), so perhaps that’s an option? Yes, there’s a monthly fee, but maybe going a month at a time and signing up for 2-3 months could help.

    Just an idea to toss out there… Thanks again, Charlie, for all your insights here!

    • Chris

      To add to that, if you really can’t afford to take part, Dave Ramsey has been known to waive fees for a few months so that people can get started when they share their situation with him.

  12. Lise

    Still laughing at the uncle comment. So very true.

    I took a Franklin Covey class on Time Management many years ago and have found that the same principles apply to financial management. What has worked for us is identifying the “big rocks” from a budget perspective and then seeing how to fit in the pebbles and sand around those.

    The class had an activity where we introduced ourselves (literally wrote an introduction speech and presented to someone else in the class) 5 years from now and 10 years from now. I was absolutely blown away by how powerful this exercise was. My husband and I talk about our financial goals in the same way. What do we want to be doing/have in one year, five years, ten years, twenty years. If your “introduction” has you owning a vacation house by a lake in ten years, that puts a different spin on whether or not you should take that vacation this year.

  13. Tiffany

    As a woman who has been budgeting faithfully with my husband for the last three years, I just want to encourage anyone here who is testing the waters to DIVE IN! Yes, our budget is VERY tight, but there is a wonderful sense of freedom in telling our money where to go, based on OUR FAMILY’S priorities, and not on some arbitrary percentage chart. Those are great to give you a springboard, but my goodness – it’s OKAY NOT CONFORM TO EVERYONE AROUND YOU!!!

    Also, a quick tip: Be patient with yourself. It took my husband and I at least three full months to make our budget behave. We adjusted, re-adjusted, and adjusted again those first three months, until we finally saw everything fall into place. Now, when we have to adjust, it takes us a few minutes of juggling, and we’re good to go. You CAN do this!!!

  14. Amber Kanallakan

    My husband and I both know that life is best while on a budget. We do very well on the “envelope system” and would love to get back on track with that method. My husband recently took a new job and is now paid every two weeks rather then the 1st and 15th of every month. This means that each month his pay check is coming in on a different day which totally has thrown off my ability to budget for some reason. Do you have any tips or tricks for this type of payment schedule?


    • Charlie Park

      Hi, Amber! A few thoughts.

      First, as you guys think/talk about it, be sure to distinguish between your budget (“is this $5 thing something I was planning to spend money on?”) and your cashflow (“do I even have $5 to spend on this thing?”). It can be easy to lump those two together.

      Second, in terms of how to deal with 26 paychecks over 12 months, what we recommend is this: take one paycheck amount and double it, and use that number to plan for the month. Then, twice a year, you’ll get a “bonus” paycheck. You can use that for paying off debt or putting towards savings.

      Third, if there’s any way you can save up a month’s worth of living expenses in your regular checking account, you’ll have a pool of funds you can draw on (and then resupply), without feeling quite so pinched. (This is a great thing to do with your bonus paychecks, as well as any “extra” money you get during the month.)

  15. Elise Adams

    Such GREAT information…I love the focus on the WHY and where we find our WHY–in our hopes, dreams and goals for the future. My husband and I attended Dave Ramsey’s ‘Financial Peace University’ which is great ‘how-to’ information, however we’re crawling out of a big hole and have tiny shovels–lol. He is under-payed currently but we are both re-setting our lives after years of dysfunctional living (addictions etc) so it’s going to be a struggle just to get to where we make enough even for the 4-walls (food, transportation, shelter and clothing). I’d love some resources about getting off government assistance…how to budget/plan etc during the pre-baby-steps stages! My guess is that it’s all about the marathon and NOT a sprint.

    Thanks again for sharing. And I share Tch’s suggestion about Dave Ramsey’s ‘Total Money Makeover’ subscription site–it’s been worth it for us, just to really solidly re-educate ourselves and get hands on support from other people serious about changing their financial lives.


  16. Heidi Smith Luedtke

    Great post, Charlie. I think your three rings example helps to clarify some poor communication we have at my house. I frequently tell my husband we shouldn’t buy something and suggest we can’t afford it. The reality is we have the cashflow to pay for the item, but it doesn’t line up with my dreams, goals, and values, so to me, it’s a waste of money.

    My sense is that having a spending plan is critical even if you’re currently flushed with cash, because otherwise you spend money on things you don’t really value. It’s easy to think “eh, we can afford that.” Maybe we should be thinking “we can afford it, but is it VALUABLE to us.”

    I’m now re-thinking my son’s upcoming birthday party plan (read: money pit!) 😉


  17. Anne

    My husband and I are on the cash system and that has worked well for us as far as expenses that are regular (i.e. eating out, entertainment, etc). The thing that is frustrating me is the non-regular expenses – the $100 for a pair of running shoes once or twice a year, car maintenance/repair, vet bills, medical bills, etc. It seems like most months something comes up and money we were planning to put towards savings/emergency fund gets put towards these items. The good thing is we aren’t dipping into our emergency fund, we are able to pay for these things as they come, the bad thing is we don’t have as much left over to put towards our longterm goals as we would like. Do you have any advice for this?

    • Charlie Park

      Those irregular expenses can be tricky. Tsh has a great article on this from a few years back that you should check out — Personal Finance 101 – Sinking Funds. I tried writing a summary here, but her post says it much better than I could.

  18. MemeGRL

    Amber’s post was so interesting–I was paid once a month at my longest-term job and I loved it–on Day 1, I had X dollars; I scheduled all my bills to be due between the 10th and 15th of the month, so I’d have a few days if the 1st was busy, or a weekend, to get all my bills in the mail; and what was left was what I could spend and save. It was fantastic, and it’s been much harder for me at subsequent jobs, so thanks for crystalizing for me one reason why I got worse at tracking moneyflow!

    My husband has been on my case about figuring out a budget since we split the bills, which is an artifact of an earlier money situation that we just never changed. But it left both of us with an incomplete picture of the family finances. We just started our 30 day startup with PearBudget, and it’s been fascinating to see where the money really goes, and also how it works psychologically. People who keep food diaries lose weight, partly because writing things down makes them really look at what they are eating, partly because they think, Do I really want to eat this if I write it down? and eat less, and partly because they think, I don’t want to eat this and have to have it on my diary forever! And we’re finding the budget the same way–prior to every purchase, I’m thinking: was I at all close on guessing our grocery budget? Do I need a sushi bento box for $5.50 or do I have something at home I can eat? If gas is .14 cheaper at the next station, and I need 14 gallons, that adds up to real money! And so on. It’s been a real eye-opener–thanks. It reminded me of some “money holes” I need to fill, and let me think realistically about where my money goes (I make more of an effort to go the half-mile further to the discount produce place than the tony gourmet market–and then am not tempted by the other goodies in the market either). It’s scary–but it feels like a good “grownup” thing to do. I’m spending the money anyway–let’s see exactly how and where.

  19. Heather Allard

    Hey Charlie!

    A fuzzy post if ever there was one. 🙂

    I’d love for you and Tsh to tackle budgeting for folks with irregular monthly income, like freelancers, startups or um, me. LOL.

    I find it so difficult to budget when my income varies so much from month to month. One of my goals is to make my income more regular, but meantime…I’d love to know how I can budget.

    Thanks so much!

    • Charlie Park

      That’s a great thought, Heather. Thanks for the suggestion. I know figuring that out is a challenge. We’ll see what we can do to cover that down the road.

      • Heather Allard

        Thanks, Charlie! 🙂

  20. mai

    This is a great post and it feels much better to think of WANTING to stick to your budget because you have goals and plans, rather than thinking of it like your crankypants diet counselor passive-aggressively asking if you really should eat that muffin after all. I love the idea that you prioritize what you love, and if you love those lattes, you plan for them – if it’s a planned expense, just like the rent or electric bill, then there is no (financial) guilt. Love it!

    My question is one for planning for bigger, less concrete goals. My husband and I are working toward adopting our first child, hopefully within a year. While we are grateful to both be working in good-paying jobs now, we have always hoped that I would be able to stay home with our children. How would you recommend pre-planning for the BIG stuff, like voluntarily giving up 35-40% of your family’s income?

    • Charlie Park

      That’s a great question, Mai. I haven’t given a lot of thought to that in the past, but I imagine Dave Ramsey probably has some good thoughts on the general subject.

      Off the top of my head, though, I’d recommend doing this: Starting March 1st, put 100% of your income towards some goal — adoption fees, a 6-months-of-expenses savings account, or something else … something Jim Collins calls a Big Hairy Audacious Goal. Live, completely, on your husband’s income. And see how it goes.

      Will it be rough? Probably. But it’ll do two things — it’ll give you a very realistic picture of what your financial situation would be like down the road, and it’ll allow you to build up towards some savings goal. Could be a good dry run before you have to do it for real … and you’ll have the benefit of full nights’ sleep. 🙂

      I’d be interested to hear if anyone else has suggestions in this area.

    • Sea

      I just wanted to share something, as I am quitting my job and as a family of five we are saying goodbye to 50% of our income. When we finally came to this, it would be 10 months to my last paycheck. First, we payed off my student loan (huge chunks and sacrifices) and payed off another small loan. We had no CC debt, just the loans. Then we started thinking what is vital to take care of now while we have money. What do need to get now- I got new glasses, which I had not bought in like 10 years so they were bad! =) Also, we wanted to get some things checked around the house- heating, etc, so we put that money upfront to make sure it was good for awhile. There are a few things we are going to stock up on (organic meats, supplies to make own food, toiletries, etc). Another thing we decided on was that no matter what, we chose a certain dollar amount to put away in savings so when I am done in 3 months we have a fair amount. Yes we have had to say no to many things but it has actually simplified our lives and made us realize what is really important and that is motivating and easier to say good bye to half our income! (Sorry one more thing, we figured out roughly what our cost of living would be about when I am done working and how much we would feel comfortable with in savings for us to live off if needed, and that was how we got to figure out how much went into savings each month).

      • Sea

        Sorry but what has helped me generate more ideas are the books:
        – Miserly Moms by McCoy
        – The Tightwad Gazette by Amy Daczyn

        Since our biggest cost is food outside of housing I started a price book and this is where I figure what we can stock up on at a great price and we have a freezer as well. Since we do try to eat mostly healthy it is not always realistic to stock up on fresh food, so we do what we can. Hope some of this helps and good luck!!

        • Mai

          Thank you both so much! I definitely have a place to start from now 🙂

  21. karen ho fatt

    This article comes at the most approriate time. Budgeting is somethign we have to do on a daily and lifelong basis.I am in the stages of teaching my nieces and nephews a bit about budgeting. Start them young I guess- the importance of Saving, Spending on yourself and Charity.

  22. Reyna

    This is the first post/article about budgeting that has ever made me WANT to budget. You’ve put a totally new spin on it. Now instead of feeling obligated and guilty about the subject, I feel motivated to see how our circles align (or if they are even in the same hemisphere). Thank you.

  23. W. B. Park

    Charlie, you do a very fine thing: you simplify a part of life that overwhelms most of us. Thanks!!

  24. Ellen

    I would like some ideas about the best budgeting software to use. Over 10 years ago I used Quicken. Is that still one of the better options or is or one of the free ones as good? With lots of expenses and family members, my first step is to track the money we spend to see where it is going and where we should make changes. This was a very positive, inspriring budgeting article. Thanks!

    • Charlie Park

      Oh, I have an idea or two. 🙂

      First, a bit of disclosure: I built and run an online budgeting tool, called PearBudget. (Tsh uses it, and I know a number of other Simple Mom readers use it, but it’s not the only one out there.) So there’s no way I can be wholly unbiased in this answer. But I’ll try to give as thorough and impartial an answer as I can.

      Almost all budgeting software (including PearBudget) is free to try out. You should try a few different programs and see how they work for you. You might like how Program A makes your numbers make sense, or how Program B works on your smartphone, or how Program C links to your bank account (or how Program D doesn’t). You can even try a few at the same time, with the same data, and see what the process is like with them.

      I’ll talk about Mint in a second, but before I get to that, I want to talk about the “free vs. paid” question, and note a few software applications I think highly of.

      A lot of people think “well, I’m trying to cut down on my debt / increase my savings, so why would I spend more money on a tool to help me do that? Shouldn’t I use a free one?” I’m not saying you have to use a paid tool to see results, but there are three reasons why you should consider it.

      First, the expense really isn’t that great. If a tool costs you $5 or even $10 a month, and it works for you and helps you save $50, $100, or more that you would have otherwise spent, then it’s a lot more valuable to you than a free tool that you don’t really benefit from. A trap that a lot of people fall into when thinking about money and the stuff they can get with it is conflating cost and value. “Free” isn’t necessarily a good thing, although it’s certainly a tempting word.

      Second, spending money on something will help you take it more seriously. Dave Ramsey mentions this regarding his classes — if you invest in something, you take more ownership of it. Your personal finances are something you really want to own.

      Third, services like Mint, and PearBudget, and so on, are businesses. They need to make money somehow. And if you aren’t spending money on them (PearBudget, YNAB), then you aren’t the customer — you’re the thing being sold (Mint). That’s not to say that handing over your personal data is never an acceptable trade-off (for example: I happily use Gmail). But go into it with your eyes open.

      So … what are budgeting tools I recommend? Ultimately, there are only two, and neither one is free. One of them’s the one that we built — PearBudget — intended to be a really simple tool to help people get budgeting, especially when they’re starting from a place of “I know I need to budget, but I don’t even know what that really means, or how to go about doing it.” It’s free for 30 days (we don’t even need your e-mail for you to get started), and is $4.95/month after that. The other one is YNAB (You Need A Budget). I think highly of Jesse (the “me” at YNAB) and the product he’s built, and I know it has a lot of fans. Their forums rival Dave Ramsey’s in terms of impassioned users who are encouraging each other to stay the course. YNAB has a 7-day trial, and then is $59.95 to purchase.

      As to Mint … My biggest issue with Mint is summed up in an early slogan they used: “put your finances on autopilot.” That’s a dangerous, dangerous idea. As I said earlier, you want to own your goals and your day-to-day spending decisions. If you enter your bank info and figure “my data’s in there, so my budget’s ‘being done’,” you’re not going to be paying attention to it. As Jesse (from YNAB) said recently, “If [personal finance software] is doing everything for you, it will do nothing for you.” Further, I’ve heard from a number of people that for Mint to be accurate for you, it takes a significant amount of babysitting. I think Mint has probably done a lot of people a lot of good. But I think, for a lot of people, the help has only been pretend. That is, they enter their info, see a pie chart magically appear, and think (wrongly) “I’ve made a budget.”

      If my earlier points about seeing value rather than cost weren’t persuasive and you will only use a free tool, there’s a spreadsheet that I made a few years ago for our own family’s use that I then made available online. It’s available here, and (again, I’m biased, but) I think it’s pretty good.

      Sorry to go on so long with this answer!

  25. capucine

    What ideas do you have for tracking spending when using a credit card for most purchases?

    In our family, we have $400 a week to spend collectively. With cash-in-an-envelope, this is simple. With a credit card (or debit card, for that matter), I do not know when I’m nearing my $400 limit.

    We’ve been logging every expense with our iphones and syncing them together, but it’s turned out this is profoundly error prone – miss a single receipt, and the whole week isn’t accurate. This has happened a lot and been a bone of contention a little too much; shopping with a toddler means I take the receipt and run to log later, and a receipt or two does get lost.

    Our family goal is traveling, so our miles-tripling credit card has gotten us the free tickets we need. We have, however, lost our grip on our spending – I always have a vague sense of “I must be getting close to $400…” but nothing solid to rely on. I really, truly need a new way.

    What kind of spending-with-credit-cards advice do you have? We had this same challenge when using debit cards. IS there a way besides manually logging each expense?

    • Charlie Park

      There are a few ways to handle this. I’ll get to some technical options in a sec, but first I want to go over the far-more-important behavioral changes to think about.

      First, one of the things that’s essential for anyone when budgeting is to have a dedicated time, a dedicated place, and a dedicated process for dealing with their “money stuff.” And if the time/place/process you have in place isn’t working, it’s worth taking a step back and seeing how it should change.

      So, say you guys looove 30 Rock and have a date each Thursday to watch it. You know it comes on at the same time every week. So set aside the half-hour beforehand to get all of your budget stuff in order. Put all of your bills in a pile as they come in during the week, and deal with them in that time. Set up your banks’ and credit cards’ websites as bookmarks on your computer (and use LastPass to store secure passwords for them, so it’ll log you in more easily). You can then see all of your card activity for the week, even if you don’t have a single receipt in your pocket. Then, in that half-hour, you can blitz on them and knock them out. You know it’ll only be 30 minutes — that’s manageable — and, at the end of it, you get Liz Lemon! Win!

      Another thing to think about is the smartphone entry you’re doing. It could be that whatever program you’re using for that isn’t the best for that (and if it’s PearBudget, I want to hear how it could be improved: or call my cell, at 804.814.2064). So maybe try something else (both PearBudget and YNAB (which I mentioned in an earlier comment) have smartphone-friendly versions). Maybe just try sending your husband an SMS with the amount spent. You’d have the date and time (since that’s when you’re sending the text), and with the amount, you could easily reconstruct that that was for groceries, or clothing, or whatever).

      I know you’re wiped at the end of the day. I’d encourage you, though, to make some tea, to sit down with your husband, and to have a money date where you talk about what’s working, what isn’t, and what you think you should change (not every day … just a big-picture chat every month or two). You can also talk about those Three Circles and see where you think you’re out-of-alignment.

      Everything I’ve mentioned so far is behavioral. There are a few technical options as well, but I wanted to go over the behavioral stuff first, because it’ll have more of an impact on you guys if you can explore it well, and, at the end of the day, I think even technical changes aren’t a silver bullet (see Jesse’s quote earlier: “If [personal finance software] is doing everything for you, it will do nothing for you.”). As to technical options that eliminate some (but not all) manual entry, there are a few. One is YNAB, which I mentioned in an earlier comment. Another would be Mint, and another would be Yodlee’s MoneyCenter. YNAB imports your checking account info that you export from your bank, and the latter two connect to your bank account and pull the data directly. PearBudget doesn’t have bank data importing, but we designed it to function like a “digital envelope system,” and have found it to work well with that mental money model. YNAB and PearBudget both have free trial periods; MoneyCenter and Mint are both free (but see my response to Ellen, above, for some concerns about using free tools for managing money, including the one where you become the product).

      Finally, something that you should think about doing regardless of how else you approach it, is to log in to your credit card company’s website, to hook up an online billpay link (either at your bank or at the credit card company’s site, or both), and to zero out your credit card every few days. That is, don’t wait to pay off the balance once a month. Pay it off early and often. That way, your bank account’s balance can help you see what’s available from a cashflow perspective, and you won’t have a looming balance on your card. Added benefit: You can run down your expenses on the site and add them in to your budgeting software, even if you toss every single receipt the moment you leave the store.

      Finally finally, make sure that using a credit card is actually helping you. I know the rewards are nice, but if you’re getting in any kind of trouble — and I include “added anxiety about what we might be owing this month” and “tension in my relationship with my spouse” in that — set the cards aside for a month or two and let things settle down. Sarah and I both have a cash back card from Capital One that we use, but we were feeling like it was affecting our cashflow, so we’ve stuck those cards in the freezer and are only using debit cards this month.

      The important thing is to be able to say “You know what? This isn’t working; we’re in this together; what do we need to change?”

      Good luck with it!

  26. Tsh

    Charlie — Best. comment. replies. ever. Thank you so much for your amazing insight here.

    • Charlie Park

      They’re asking good questions. 🙂

  27. Linda

    Thank you so much for the article. I am trying to access your site: without any success. Has the web site address changed? Thanks for your help!

    • Charlie Park

      🙁 No, sadly, our server melted (not literally) in the last day or so. We’re hoping to get it back up really soon. The engineers at our hosting company are hoping to resolve the issue ASAP.

  28. Liz

    Slightly late to the party as I catch up on my google reader, but LOVING this post. I’m interested to know whether PearBudget is appropriate for UK use – or if there are plans for a UK version?

    • Charlie Park

      Thanks so much! PearBudget is UK friendly. You’ll want to change the currency to £ and the date format (to DD/MM/YY), but those are both easily done. Ping us ( if you have any questions on how to do that. Thanks again!

      • Liz

        Fab – thank you 🙂 Will have a proper look this evening.

        • Liz

          Finally got around to looking at this properly – amazing! Love how quick it was to set up, love how beautiful it all looks and how intuitive it is. We’ll definitely be signing up at the end of our trial period. Just wanted to stop by and say ‘thanks’ again.

  29. Patty

    What really hit home with this is the three circles. After examination, I find a huge difference between what I think I spend, and what I actually spend. Like you said, “Yikes!” I’m going to share this with my husband and work on it. Thanks!

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