When it comes to lists of fun things to do, very few of us would include budgets, household or otherwise! But, with a little bit of strategic planning, and help from some budget-friendly methods and tools for creating a household budget, you could be budgeting like a pro in no time.
To help make the process a bit more (dare we say it!) appealing, we’ve done some research and uncovered a few unexpectedly interesting budgeting ideas and concepts! They made our list because – tools are tools and don’t necessarily have to live on a mobile device or computer to be useful! We’ve also included a few options you’d expect on a list of free household budgeting tools. So – if you’re ready to tackle that household budget, read on for inspiration…
Choose Your Budget
Before we get into our list however, a note about budgeting systems… Common budget systems include:
- Zero-based budgets – this is where you assign every $ of your income to a category, including savings
- Percentage budgets – this method allocates a set percentage of your income to various categories. For example, a 50/30/20 budget allocates 50% of your income to essentials, or needs; 30% to wants, and 20% to debt repayments and savings
- Priority-based, or reverse, budgets – in this type of budget method, you allocate money in order of identified financial priorities
With these thoughts in mind, what are some effective methods and free tools for creating a household budget?
1. Pen And Paper
We start our list with an oldie but still a goodie – ye old quill and papyrus. These 2 uncomplicated tools have been serving us faithfully since they were invented, and are still perfectly adequate budgeting tools if you want to keep things simple.
To get started, you can go ‘proper’ and invest in a ledger or purpose-made budgeting stationery. Explore sites like Canva to find free downloadable budget planner templates for printing (or use them to custom-design your own). Alternatively, you can MYO with an old exercise book and a ruler.
Get Creative With Your Household Budgeting
Whatever your choice of accounting ‘stationery’, you can still get surprisingly detailed and creative with a pen and paper budget. In fact, it’s a bit like journaling in that you can write wherever and whatever you want on the page. From underlined notations and attention-grabbing exclamation marks warning of budget limits, to stylish stars and asterisks highlighting savings goals – just add whatever you want wherever you need to remind yourself of something. All the fun of journaling with the seriousness of budgeting!
If you enjoy creative activities like journaling, or your finances are relatively simple, pen and paper, or budget journaling, could be for you!
2. Spreadsheets And Online Worksheets
Who remembers Lotus 1-2-3, the granddaddy of modern spreadsheets?
Spreadsheets have been serving as effective budgeting tools since they first hit our computer screens. Currently we have MS Excel, Google Sheets, and swags of free Excel alternatives. There is even a rumour that a Linux version of 1-2-3 is set to make a comeback!
Spreadsheet Templates
Most spreadsheet programmes, even free ones, come with customisable accounting and budgeting templates. You can also download free online budget worksheet templates from sites like MoneySmart (an Australian government site), Microsoft, and so on.
These templates are very handy if you’re technologically challenged, as the formulas and layout are already set up for you. However, if you are handy with a spreadsheet, and understand budgeting principles, you can create your own or modify a supplied template.
Interactive Worksheets
Alternatively, some sites (MoneySmart, Nerdwallet etc) have interactive online budget worksheets that can be completed online with the option of saving your data to your device after each session. In some cases, the site also provides analytical services (free and paid) to help you manage your finances.
What Can You Do With A Spreadsheet Budget?
Spreadsheets budgets are a step up from pen and paper because they can automate various processes whilst still allowing some degree of flexibility. A spreadsheet budget offers the ability to:
- Track income and expenses in as much, or as little, detail as you want,
- Automate calculations with formulas,
- Analyse your spending,
- Set, track, and stay on top of savings/financial goals with fancy functions like conditional formatting,
- Use different sheets for different budget periods – weekly, monthly, quarterly, annual etc,
- Import bank statements, which saves a ton of data entry,
- Create fancy graphs and charts,
- Share and collaborate with your partner,
- Send yourself reminder and notification emails when you need to do something, or have reached a budget limit,
- Use the mobile app version on your phone so you’re never very far away from your budget!
3. Kakeibo
In 1904, Japanese journalist, Hani Motoko, published a budgeting and personal finance management method she called Kakeibo (English translation ‘household account book or financial ledger’).
Popularly known as ‘the Japanese art of saving money’, Kakeibo takes a holistic approach to household budgeting. It promotes the use of categorised expense envelopes and careful expense categorisation; detailed written financial records; and, in true Japanese style, thoughtful reflection on spending habits.
The goal of Kakeibo is not just to keep a household budget but also develop an overall understanding and awareness of your spending habits. For example, if you spend a lot on takeaway meals, Kakeibo encourages you to explore why you do, and consider ways to reduce that spending. It’s about implementing mindful, intentional spending to achieve financial goals.
The Four Kakeibo Questions
Kakeibo revolves around 4 key financial questions:
- How much income do you have?
- How much money do you want to save?
- How much are you spending?
- How can you improve your spending habits?
And uses simple, basic expense categories such as:
- Essentials (food, rent, utilities, clothes etc)
- Non-essentials (dining out, takeaways etc)
- Cultural (books etc)
- Unexpected / emergencies
You’ll find a number of free downloadable Kakeibo Method templates (paper and digital) online.
4. Envelopes, Cash, And Glass Jars
This budgeting method caught our attention because, although digital envelopes are common in budgeting apps and programmes, the paper ones are not! Nonetheless, this is one of the oldest budgeting methods, and an option if you prefer dealing in fiat money. It’s also a very visible reminder that once you spend money, it’s gone!
Cashing In On Envelopes
If you still get snail mail, up cycle the envelopes. Collect enough for the number of budget categories you need – groceries, entertainment, takeaway meals etc… Allocate an amount for each category, and put the money in the relevant envelope. Then spend wisely because when the money in that envelope runs out, that’s it. No more spending in that category until next payday.
Even if you do most financial transactions online, and who doesn’t these days, consider withdrawing enough cash each week, or month, for regular household expenses, and popping it into envelopes anyway. Alternatively, you could write the allocated amount on the envelope (or on a piece of paper to go in the envelope) and deduct what you spend until you reach $0. The same rule applies as for cash – when you run out of fuel in that tank, you can’t refill until you get paid again.
Set Up A Savings Envelope
You could also set yourself a goal to transfer any cash left in any of the envelopes at the end of the week/month into a savings envelope, or a special savings account.
The Glass Jars Method
A variation of this system uses glass jars instead of envelopes but it works the same way with the added visual effect of clearly seeing your cash disappear.
Note – you’ll need somewhere safe to keep the envelopes, or jars, for this system.
5. Free Budgeting Apps And Programmes
If you’re up for the challenge of an app or software programme, or just prefer apps and software programmes, read on… Before you do though, let’s hit the pause button, and consider what makes a good budgeting app. What should you look for when deciding to download a free budgeting app or software programme?
What’s In A Good Household Budgeting Tool, Free Or Otherwise?
- A free app or programme should be FREE – 100% free for life with enough functionality to make it actually useful. Many programmes are promoted as ‘free’ but in reality, only offer a ‘free trial’ or have a limit on the number of transactions you can input. Or – they have a paid version so the free version is so limited in functionality it’s useless for all bar the most basic functions.
- Free or not, it should offer most of the following features:
- Have a user-friendly interface and be easy to use, and customisable
- Be able to track and categorise expenses and income
- Let you create and customise budget categories
- Allow you to set financial goals
- Plan and track your savings
- Send notifications and alerts
- Integrate with your bank account or import bank statements
- Track debts
- Produce reports and analytics
- Have advanced security and privacy measures
- Be mobile friendly if you’re using it on a computer
- Provide regular updates and support, including community support
- Allow offline access if it is an online product
- Be multi-device compatible
- It should be relatively free of bugs and issues – check customer reviews as they will give you a good insight into any issues with an app.
- It should still be alive and well! Apps come and go all the time and even the most popular can be axed at any time. MoneyBrilliant and Pocketbook are 2 cases in point.
- If it offers interactive banking functionality, make sure it works in Australia, and complies with Australian financial product regulations.
Free Budgeting Apps And Programmes
Here are two examples of good budgeting apps with unlimited free versions and similar features across both their paid and free versions.
Frollo:
Frollo is an Australian fintech company, and their award-winning personal finance management app is free (and available for downloading from Google and Apple). It is an excellent budgeting tool but, unfortunately, only if you have a mobile phone as it doesn’t have a desktop version!
Frollo offers:
- Open Banking integration
- A suite of budgeting tools
- Goal setting tools
- Analytical tools
- Bill reminders
- All your accounts in one place
- Bank-level encryption
Goodbudget
Goodbudget is a digital version of the envelope system, and incorporates Kakeibo principles. Available as both a mobile and desktop app (rare these days!), it has many features that make it a good choice for household budgeting. One of these is syncing for multiple users, meaning all parties involved in a household budget can access the app, and the budget.
In keeping with Kakeibo principles, Goodbudget incorporates educational resources to help users ‘understand’ their spending habits, and to assist with financial planning and budgeting.
Features:
- Envelope budgeting system
- Expense, income, bill and debt tracking
- Reports and insights
- Can be synced across devices
- Budget sharing for collaborative budgeting.
- Savings goals
- Sends email summaries
Overview Of Free Household Budget Tools And Methods
Creating a household budget doesn’t have to be tedious and can actually be a surprisingly engaging and empowering process. From the simplicity and journalistic creativity of pen and paper to the structured analytical power of spreadsheets, or the holistic approach inspired by Kakeibo, there’s a method for every household budget preference and style.
For technology users, free user-friendly budgeting apps like Frollo and Goodbudget manage to make household budgeting both manageable and enjoyable. Select the household budgeting tool and method that best suits your personal preferences and requirements, and start mastering your household budget like a pro!
