Once you’ve determined which budgeting direction you will use, you need to start to layout the specifics of your budget plan.
One of the fundamental parts of creating your budgeting plan is to choose between a cash budgeting system and a digital budgeting system.
These are not to be confused with budgeting tools such as envelopes, check registers, and other types of tools. All of the tools for budgeting can be customized to fit the system you decide to use.
A cash budgeting system is exactly that. It’s cash. No credit cards, just cash. Of course, when you get to the point of saving, it could be a good idea to open a savings account rather than keeping a large supply of money around, but we’ll get to that later.
A digital budgeting system utilizes credit cards, checking accounts, online interfaces, apps, and many other technological opportunities. All of your budgeting and tracking is kept in digital form and you are responsible for sticking to your budget without having tangible money to stop you from over-spending.
There are many benefits to both a cash system and a digital system.
Cash budgeting is great for you if you like being able physically hold your money that way you know exactly how much you have at all times without having to log into an app or account. Cash budgeting is also a great option for you if you dislike or have trouble with technology. The system you use for budgeting should easily fit into your lifestyle. If you don’t like being on the computer or phone, a cash budgeting system may be best for you.
Digital budgeting is also a great budgeting system. This system is good for you if you enjoy technology and find it easier to look in your app to see what your balance is. While the digital world makes so many things easy for us, you need to pay special attention to your spending. Unlike the cash system, where you literally can’t spend anything more than you have, the digital system shows no boundaries when you pull out the credit or debit card and run a transaction. On the other hand, with digital budgeting there are a ton of options for charting your spending so you can analyze where all of the money is going.
Whichever budgeting direction you choose, make sure it fits in with your lifestyle and your budgeting needs.