Budgeting software

Getting a good budget is the essential first step if you want to get out of debt and can be a valuable tool if you want to start saving more. This post looks at three very different websites that can help. Ideally you want one that is simple to use and very flexible, but these things aren’t always compatible.

Of course you don’t have to use a website. My parents started keeping detailed written records in a small cash book every month when they got married, and 61 years later they are still doing it!

If you are good with numbers you can create your own spreadsheet – that means you can just have the expenditure and income lines that are relevant for you, not have pages full of stuff like Child Maintenance,  State Pension and Cigarettes. One advantage of doing this is that once you get into serious savings, the spreadsheet can also be used to keep a record of those. But if you go this route, have a look at the options here to get some ideas – most people remember to put Food, Electricity and Petrol on their expenditure, but you also need to think about the annual things like Road Tax, irregular items such as haircuts and the ones you hope won’t be needed such as dental charges.

The Money Advice Service’s Budget Planner

MAS is an independent service set up by the government, they produce the excellent debt advice booklet that we give out to clients at my CAB.  My thoughts on using MAS’s free Budget Planner :

  • easy to use with a comprehensive list of incomes and expenses
  • you select the frequency (weekly, quarterly etc) for each item then it neatly converts everything to monthly
  • you can save your budget and come back to it – but don’t forget to write down the id they give you when you save it.
  • I couldn’t get the ’email the results to me’ to work
  • you can download the Planner into a spreadsheet, which adds everything up fine, but it kept telling me I was ‘spending everything I had coming in’ even when I wasn’t.
  • it isn’t very debt orientated – you just put in a single line for credit cards, there is nowhere to put in secured loans etc. For anyone that is trying to get to grips with a debt problem, this isn’t going to be helpful at showing the whole picture.

Statement of Affairs calculator

This free calculator was specifically designed to let people enter details which they could then post on the Motley Fool’s Dealing With Debt  board or on MSE’s similar forum. My comments:

  • not a comprehensive list of incomes & expenditures, but you can add the extra lines that you need
  • you have to convert all figures to monthly before entering them
  • it generates useful warnings if you have might have missed something out
  • good handling of secured / unsecured debts
  • nice ‘balance sheet’ entries – the size of the debts (mortgage and consumer) and the value of the house are essential bits of information for someone trying to see their full financial picture, not just their cash flow situation
  • can be used to calculate pro rata offers to creditors if you need a debt management plan.

 You Need A Budget (YNAB)

Unlike the other two websites, YNAB is software that you have to pay for, costing $60 at the moment, about £40. There is a free trial  and you don’t have to put in any card details or even give your email address, so cancelling it won’t be a problem.

It’s slick with lots of features. It is intended as a method of monitoring your budget closely over a lengthy period. Put in your current, savings and credit card account balances at the start, you then see how the expenditures and incomes affect them and how they measure up against the budgetted figures.  To start saving for a  a new conservatory, add it as a new savings goal, decide how much you want to save for it each month then monitor how much you actually do.  An app on your mobile can sync with your PC at home using Dropbox.

You will probably either love it or hate it. A lot of information needs to go in at the start to make it really useful, but it will give you an excellent view on what is currently happening and a good basis for how to plan to improve it. The website has tutorials on how to budget better, based around the following rules:

  1. Give Every Dollar a Job (nb it’s easy to set up the software to work in pounds!)
  2. Save for a Rainy Day
  3. Roll with the Punches
  4. Live on Last Month’s Income

Finding the money leaks

Whatever approach you use, remember Garbage In Garbage Out: your budget is only as good as the figures you put into it. There are two key sanity checks to use when you are setting up a budget.  First make sure you aren’t adding up apples and pears: lots of people think ‘weekly’ when asked what they spend on groceries, monthly for their mobile costs and annually for car insurance so these all have to be converted to monthly. Secondly, look at how much money the budget says you should have left at the end of the month. £260 is good… but is it realistic? If you never have anything left, then where is your money really going?

The first step in finding where it is leaking away to is to sit down with your old bank statements and credit card bills and go through them. This may be all that’s needed. But if your mystery expenditure is now identified as ‘cash withdrawals’ and they look  surprisingly large, then you and your partner may have to keep a spending diary for a month or two.


  1. i used ms money for a few months then decided the only way it saved money was because it took so long to sort it out that i had no life left to spend anything

    i might give ynab a go it looks like its meant for real people not accountants 🙂

  2. Minesh P says:

    I’ve been using GNUCash for the last few years. Its not the easiest to use program ( especially entering stock sales ) but its more detailed than the budget spreadsheet I set up before and hopefully its supported for a long time being an open source project.

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