The Budget Binder - Part 4 of Your Perfect Budget

This is the fourth and final step of creating your perfect budget. We've already covered getting started, creating categories, and using a cash system. This week is about the budget binder, which is for those categories of your budget that you can't pay for in cash (bills, savings, etc.).

You'll need to get some looseleaf paper and a binder to do this step.

First, figure out which categories you pay straight out of your checking account (be it via check, online payment or automatic withdrawal). Then, make a section for each category. When you figure up your budget, write the amount that you are budgeting for each category in it's section.

This binder will be a "checkbook register" of sorts. Whenever you make a payment or add money to each category, you will add/deduct it in your binder (and then adjust your real checkbook register accordingly). This will help you know that even though you may have money in your checking account, does not mean that you can just spend it and it's a free for all, this way you will know that each dollar has a purpose and what that purpose is!

This strategy only works if you budget the same amount for each category, no matter what. Even if the amount on the bills varies each month (for example an electric bill). This way you can keep track of how much money you have left to your electricity "account". This is a great method to use if you want to "save up" for months (typically winter months) that have higher bills during months that have lower bills (summer months).

So, that's that! Stay tuned, because next week starts my new series -- How to get your Grocery Budget down to $20 a week!