We are all human, we all make mistakes in life, but bad personal budgeting generally happens in two ways:

• By far the most common mistake people make is robbing Peter to pay Paul. That is, perhaps using a credit card to pay a bill or using some money put aside for a future expense to pay for a more immediate expense.


• The other common mistake is living pay-to-pay. This is an easy trap to fall into. When a bill comes in you pay it from your pay packet and whatever you're left over with from rent and food is your entertainment money, and hopefully some savings. Adding new regular expenses, like repayments for purchases, makes the situation increasingly worse. Many young people fall into this trap.

The management (or rather non-management) of money in the above examples is exactly what leads us into believing that we can never get ahead, we can never get that better car, we can never achieve buying a house, we can never get the credit card balance going in reverse, or simply, we can never get on top of those bills.

Without action, these traps can hold us for many years, or even our entire lives!

Budgeting can be associated by trapped non-budgeters as moving out of the comfort zone, or something which they will do as soon as they buy a car/get married/commit to buying a home etc. etc. What everyone needs to realise is that starting a budget now is easy. It does not rule your life and you can start NOW!

Before I go much further it is probably helpful to mention that there are methods of budgeting that range from simple and effective to extreme/difficult to master. More extreme methods that I have seen involve recording every single receipt and balancing the budget at the end of each day. Whilst potentially effective, this is difficult, if not impossible to get new budgeters to use, and any lack of discipline causes the entire budget to collapse.

Now, for the easy way. The easy way involves itemising all of your expenses - every last one. Then you need to calculate the impact of each expense against your pay, whether that be weekly, fortnightly, or even monthly. If your pay varies it is best to take the low average of it. Always calculate the high average of bills.

Calculating expenses against your pay is not as easy to figure out as it looks. As an example, if you are paid fortnightly, and you have a monthly expense, if you work out a few months on paper you will soon discover that between that monthly expense there are usually two pays, but sometimes there are three. If you average to the two, your budget will be considerably short-calculated over a period of twelve months, and this does not help if your expenses are not far short of your income.

Want to spend less than 5 minutes per week managing your budget? Sound impossible? Spreadsheets are not going to be any help with the complexity of differing pay periods between expenses over time, and most home budget planning software focus on accounting-style methods of receipt recording (which means work for you), this leaves one tool that is *right* for the job - BudgetSwift. BudgetSwift really is the best home budgeting software.

BudgetSwift displays your outgoings like a spreadsheet but is far more powerful. Once you configure it with your income, pay frequency, and a past pay-day milestone date you can proceed itemising your expenses, and like magic, you will be told in simple terms what amount must come out of each pay to facilitate the expense. For example, a phone bill may cost $25.00 per pay when looking at the monthly bill, so that is what you need to set aside. But you only tell BudgetSwift what the average montly bill is and the day of month that it normally falls on, and it will instantly work the rest out.

The magic only begins there, it goes much further. Not only can you budget for expenses, you can also budget for purchases. You enter the cost of the item you want to purchase, the date you want to purchase it on, and it will work out the rest, just as if it were a new expense.

Now, take all of that and add cross-categorisation. Most budgeting software will allow you to categorise an expense, however, BudgetSwift takes this much further. Each budget item can exist in more than one category. So you can have one category that is 'utilities' and another of 'household expenses' and have the same expense categorised in both. Take this concept further and you can itemise a category which affects your credit card, so you know all payments which are taken automatically from the credit card and view just those.

All budget items in BudgetSwift have several pieces of important information which you will not get from most competing software. You can instantly see the amount that must be taken from each pay, the total budgeted cost for the budget item, and the total amount which needs to be budgeted to-date for each of those items. When looking at categories or all budget items, the total of each of those components are shown in a summary in BudgetSwift's status bar so your planning is complete.

Once you have itemised your outgoings BudgetSwift provides simple, but very effective reports.

First, you have the Budget Calendar which you can printout and stick to your fridge. This calendar shows expected upcoming billing days that give you a view of the whole month just to remind you of what you can expect in the upcoming month. This will help you from deviating from your planned expenditure.

The second report is a report of all budget items, or those from a selected category. This outlines the itemised expenses and their total for each pay. Perfect for presenting to a loan officer; they will be blown away by the detail, and if the report can demonstrate that you have surplus income beyond all of your expenses they can't but accept your application. They are well aware that many applications do not account for a multitude of small expenses which have significant impact on income. Because you can report by category you choose what you want to include on the report.

Many children have little/no income and little or no expenses, yet budgeting can play a valuable part in their lives as practise for adult life ahead.

BudgetSwift allows you to create many accounts. Normally you will have a main family account, and other personal accounts. Accounts can be passworded so that your children don't accidentally change the figures in your personal/family budget accounts.

The point of a BudgetSwift account for your children is so they can maintain a long-term savings plan, future purchase plans and short-term personal spending plan. A child's whole BudgetSwift account may only have four budget items. Success in saving can be measured at any time by viewing expected totals against the actuals.

Don't be daunted, BudgetSwift really is a simple tool to use. How you manage it is simple too. But, there are probably a few questions which are casting doubt, and I bet I know what they are. I'm not psychic, I'm a normal person who had the same budgeting problems as everyone else. I paid for my wedding and was able to secure a loan to buy my home and it's simply because BudgetSwift was able to get my budget on track and I could manage the money I had. No more surprises!

I'll address common questions and answers in a Q/A format:

Q:I can just use Quicken, or Money.
A:BudgetSwift will help you accurately manage your budget with five minutes or less of your time per week. There is no way you can achieve this with Quicken or Money, they are money management tools. It's difficult to make a comparison because BudgetSwift does not follow all the usual accounting rules, it is a planning tool and stands in a class of its own.

Q:So, I have all of these expenses, so how do I manage the money?
A:Simple, create multiple bank accounts and split expenses from savings.

Q:Why even use software, why not just pay utilities etc. an average on every pay so I never get a bill?
A:You will be robbing yourself of bank interest and this is not managing your budget. Even if you choose to do this, BudgetSwift will still be vital for your budget planning.

Q:I want a life, I want to go out!
A:Everyone deserves entertainment - we weren't placed on this planet to balance the books! Your entertainment becomes another budget item in BudgetSwift. Place entertainment spending in its own bank account to prevent over-spending.

Q:I'm already in debt, all hope of budgeting is already out of the window.
A:This is an even more important reason to use BudgetSwift! You can analyse your spending to find areas where you can reduce costs and divert more money towards debt.

Q:I'm pretty sure my expenditure outweighs my income.
A:Similar answer to the previous question; BudgetSwift will help you here. Use BudgetSwift to isolate any areas of overspending and act on it! If you think it necessary, seek a financial advisor and take your BudgetSwift reports with you.

Q:Are you crazy??? I have a hundred budget items, how am I supposed to deal with all of them each pay - it'll take me hours!!!
A:Seriously, using BudgetSwift will literally take five minutes or less of your time per week. Remember, it's a budget plan, and each pay you are only moving two-to-four blocks of money according to that plan. It really is easy.