With tax season and re-enrollment upon us, many parents have budgeting on the brain. After realizing our favorite budgeting program wasn’t quite working out, specifically meaning that my wife kept thinking we had more money than we actually did, I decided to go searching for a new program.

The main criterion I was looking for in a budgeting program was that it follow a “zero-based” philosophy. Zero-based budgeting means that for every dollar you receive, the budget assigns it to a purpose. So in the end, the money you have minus your budgeted money equals zero. Some people refer to this as “envelope budgeting.” Think of your budget as taking your paycheck and putting each dollar into a separate envelope: one for your mortgage, church offering, savings, tuition, utilities, etc. This way you can make sure you’re taking care of your main priorities before you start putting money in the single-malt scotch whisky envelope. This is to avoid day-to-day decision making where you have a checking account full of cash and think you can spend it on expensive spirits, forgetting that your mortgage is due next week.

Physical Envelopes

You don’t even need an electronic tracker to use a system like this; some people physically take their money and put it in envelopes. We did this for a short time after we got married, and it was pretty cumbersome, but there was no risk that we would spend money we didn’t have. At the time we were dirt poor, but when the money in the envelopes starts to get to be something worth stealing, you might not want to have so much cash in your desk drawer. A compromise is to pay your large expenses electronically and use physical envelopes for your more discretionary categories of spending where you might need more discipline anyway. You can buy hundreds of envelopes at your local office supply store for less than $10.

A Spreadsheet

I spend most of my working life in spreadsheets, and I have a love-hate relationship with them. If you don’t want to pay for a program or want maximal control over your budget, you can just make a spreadsheet with every transaction and make a column for your envelopes. When you get your paycheck, split it into positive transactions to fill each envelope. If you know what you’re doing, you can sum up your envelopes and know how much you have in each. We did this for about a year after getting married. It was pretty labor intensive, and every now and then I’d make an error and have to explain that we didn’t have as much money as we thought. You can set up a spreadsheet for free using Google Sheets.

Tiller

Tiller ($59/year) isn’t really an “app” on its own. It just takes the spreadsheet approach one step further. Tiller imports your bank transactions into a spreadsheet that you can customize on your own. They also have some powerful spreadsheet budget templates. If you like spreadsheets, but don’t like manually tracking your transactions, Tiller bridges the gap between customizability and convenience. I tried setting up my budget in Tiller, and the import worked very well, but eventually I decided it was easier to let You Need A Budget (see below) handle all the nuts and bolts. One key feature missing from this template I used is that YNAB keeps up with how much I need to save each month to reach various budget goals. I bet I could figure out how to make a Tiller-connected spreadsheet do that, but after spending all day building spreadsheets for my corporate overlords, sometimes I like to let others do this kind of work.

GoodBudget

We have used GoodBudget for the majority of our marriage. It is a simple, web-based, envelope-based budget system. Money stays in the envelopes from period to period, unlike some other programs that want everything confined to a given month. You can set up a simple plan ahead of time so that you know how much you’ll be putting in each envelope. GoodBudget embraces the envelope concept, and anthropomorphic envelopes smile when the envelopes are full and frown when there is “negative money” in them. You can do all this in the free version; the paid version ($50/year) also allows you to assign your envelope money to bank accounts and credit cards so that you can make sure everything adds up. This way you can have money in checking assigned to an envelope, and spend money on a credit card from the same envelope and know you can pay off the credit card. This is the reason we moved from a spreadsheet to GoodBudget: to avoid the weeping and gnashing of teeth on the day of judgment, err, reconciliation between bank accounts and envelopes.

GoodBudget allows you to import bank account and credit card files, but it is not an automatic link like some other programs. You have to download the file from the bank and import it to the website whenever you want to add transactions, at which time you have to assign each transaction to an envelope. This can be a time consuming process, especially if you don’t do it regularly. The import process is the reason we ditched GoodBudget, but if you are a faithful checkbook balancer, then this shouldn’t get in the way.

YNAB

YNAB ($84/year) stands for You Need A Budget, which is also a book and entire philosophy about budgeting. Part of the philosophy is the zero-based envelope concept which YNAB describes as “giving every dollar a job.” YNAB encourages you to go even further and allocate money to things like replacing your computer in several years rather than leaving it up to an emergency fund. The YNAB philosophy includes “embrace your true expenses,” which means that you recognize the fact that you already know you will need to replace your computer, pay for car registration, and other things on a less frequent than monthly basis. So when I set up my YNAB budget, I ended up with many more envelopes than I had with GoodBudget. This made things seem more complicated but also made me feel as though I knew what my expenses would be for the foreseeable future and could work toward paying for them before they happen.

I am still in the trial period of YNAB, but I think it is the one I am going to stick with. My main complaint so far is the way that money rolls over from month to month. Money left in an envelope rolls over, but the logic it uses when you overspend in an envelope and have negative money is overcomplicated, in my opinion. Another issue is that YNAB works in months, so if your paycheck is biweekly, you have to be creative with how you fill your envelopes. YNAB’s preference is to get to where you are funding next month’s envelopes ahead of time so that it doesn’t matter that there is a timing difference. But that can be discouraging when you don’t yet have enough money to budget for the next month. YNAB allows me to import transactions automatically, unlike GoodBudget, and it does better with my budget itself than any of the programs I’ll talk about below. So despite the complaints above, I think it is the best out there for most people. YNAB also comes with videos and online workshops to help you learn how to get your budget under control. YNAB is not as simple as the other envelope-based systems mentioned earlier, so many people may want to use those to try to get ahead of the learning curve. Another nice feature of YNAB is that it tracks your investment accounts. This isn’t a must-have for me, but it’s nice to be able to see your total net worth at any given time.

EveryDollar

EveryDollar is Dave Ramsay’s budget program. One way you know this is that they won’t let you use a credit card to pay for it (Dave Ramsay does not like credit cards). EveryDollar is a simpler implementation of the envelope system than GoodBudget. You have your envelopes each month and you fill them with income. For most categories you aren’t supposed to rollover money from month to month; the idea is that if money is left you put it in the emergency fund (another Dave Ramsay signature). You can use the main features of EveryDollar for free or pay $99/year to get automatic bank updating. EveryDollar imports transactions from my banks well and even brings in credit cards (though the documentation says he’d rather you stop using them), but I didn’t like that it doesn’t really reconcile your accounts. In GoodBudget and YNAB you can add up all the money in your envelopes and be certain that money is in your accounts. EveryDollar takes a more month-to-month view and relies on the fact that if all your transactions are accounted for then everything will balance out in the end. EveryDollar also lets you collect money in envelopes over time (called “funds”) but doesn’t let you set long-term goals for them as well as YNAB and GoodBudget do. With these other programs, you can set a target date and the program will tell you how much to set aside each month to get to the goal. EveryDollar makes you come up with the monthly amount, and if you get behind or are able to get ahead with a surplus, you’d have to recalculate your new monthly goal. I think EveryDollar would be great for someone getting started in envelope budgeting who might get overwhelmed by YNAB or who appreciates the Dave Ramsay mindset.

Mvelopes

Mvelopes ($48/year) seemed promising as a more complex program for tracking an envelope-based budget. In addition to the budget, Mvelopes allows you to set up a “funding plan.” This solves a common problem in envelope-based systems. If your money comes in every two weeks, but you have a monthly amount to budget, you have a disconnect. Mvelopes lets you bridge this gap by deciding how much you need to put in the envelopes first (the budget) and then deciding how you’re going to fund the budget from your paychecks (the funding plan). This could also be helpful if you have multiple paychecks or variable income.

The problem with Mvelopes is that it is buggy. I had to contact customer support twice to try to get my accounts connected and to access the mobile app, and these issues haven’t been resolved a week later. I think I signed up during a transition that is giving them a major headache, but in reading other customer’s complaints, it sounds like they have had problems in the past too. So I have abandoned Mvelopes, though I think it has a promising concept for people who want to plan ahead how they’re going to fund their budget.

Non Zero-Based Systems

The first program we used when we ditched our original spreadsheet was Mint. This is a free website by the makers of TurboTax and QuickBooks that tracks all your transactions. Mint will allow you to make a budget, and with some work you could even run a zero-based budget with it, but it’s not built for that. Our main complaint with Mint is that it is too automatic. It tries to categorize everything automatically, and there is not an approval process where we could identify which transactions needed to be checked after the algorithm tried to do it for us.

Another popular financial tracking program is Quicken ($45/year), which my mother used in the ’90s. It is still out there, and will help you track all your accounts. I have not used it because it does not appear amenable to zero-based budgeting. Finally, Personal Capital is a site I use to track investment accounts. Personal Capital is free, but they try to sell you their financial advisory service. I have only received one call from them and I told them I wasn’t interested. I think if I had more money they might call me more often.

My point with all of this is that setting up a budget doesn’t have to be difficult.  There are so many good apps and programs out there that I am sure you can find one that will work for your family.  Having a budget has really helped my wife and me be able to afford tuition for our girls at a private school, to save for the future, and also to not feel guilty when we spend within our budget.