smart spending

How to create a budget that works for you

Use automated tools to execute your budget
Use automated tools to execute your budget © Cheryl Savan/

Monique Harps, a money manager and financial coach in Tulsa, Okla., says that budgets are one of the most powerful tools you can use to achieve money goals, so it is important to make sure your budget is executed in alignment with a set of financial goals.

One way to execute a budget is to use online tools and services offered by most large banks and some smaller banks and credit unions to automate the execution process.

Use your bank's bill-pay service and similar services by utilities and cellphone companies to make automatic recurring payments for all fixed monthly bills. For savings, use your bank's funds transfer service to set up automatic recurring transfers to a savings account. For all other expenses, including gas, groceries, spending money, etc., leave money in the checking account and access it via debit card, or get cash from the bank and divide the money into envelopes.

Each envelope will contain the amount allocated in the budget, Harps says. For example,
if you allocate $200 for spending money, place $200 cash in an envelope marked "spending money" each month. An alternative is to use a prepaid debit card or reusable gift cards. You can add the money to it, so you do not have the cash in your wallet.

But don't forget about the prepaid card. Nonuse can draw a fee after a certain period of time.


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