Lifestyle is a key driver of a budget. Another key point is controls on expenditure to help adhere to a budget. There are a variety of ways to help control ones spending. A method that works well for one person may be quite useless for another person. Cutting up the credit cards and only ever using cash may be ideal for one person. Another person may be better served by using cards whenever possible and keeping the barest minimum of cash. The spending controls do depend on the particular psychology of the individual.
A simple way to control expenditure each day is to set aside the amount that can be spent each day. An easy way to do this is to put a slip of paper in ones wallet. The amount that can be spent today is placed in front of the paper and the remaining cash stays behind the paper. Loose coins of a minor amount can be disregarded. An extra amount goes in front of the paper on those days when a weekly expense, such as a train pass, is to be paid. The credit card should not be used for daily expenses. This method does not work for everyone so each person must find ways to work for one’s self.
Preparing and managing a personal budget really can be an easy and simple process. As has been demonstrated, the key to a good budget is understanding why amounts need to be spent and how to maximise value for money. Financial software is seldom necessary but certainly can allow tighter control of a budget. Recording every expense and using software to monitor expenses does allow tighter management of budgets however that could prove a lot of effort with little gain for a modest and simple budget. Software is often touted by those who are selling that software and usually presented as an easy way to manage the complexity of budgets. A personal budget need not be complicated. If a budget is complicated then it seems desirable why it is complicated and look for ways to make it simply and thus easier to manage.