Your money: How to make budgeting as painless as possible

Budgeting is a pain. But what’s more painful is a bill you can’t easily pay, debt that costs a fortune or not having enough money to retire.

Fortunately, you can have a useful, working budget without watching every penny. Automation, technology and a few simple guidelines can keep you on track.

The following approach works best if you have reasonably steady income that comfortably exceeds your basic expenses. If your income isn’t steady or doesn’t cover much more than the basics, you might need to track your spending more closely.

Also, no budget in the world can fix a true income shortfall, where there’s not enough coming in to cover your basic bills. If that’s the case, you need more income, fewer expenses or outside help. One place to start your search for aid is, which provides links to charitable and government resources in many communities.

Otherwise, though, you can craft a spending plan with the following steps.


Must-have costs include housing, utilities, food, transportation, insurance, minimum debt payments and child care that allows you to work. Using the 50/30/20 budget, these costs ideally would consume no more than 50% of your after-tax income. That leaves 30% for wants (entertainment, clothes, vacations, eating out and so on) and 20% for savings and extra debt payments.

A budgeting app or your last few credit card and bank statements can help you determine your must-have costs. The more these expenses exceed that 50% mark, the harder you might find it to make ends meet. For now, you can compensate by reducing what you spend on wants. Eventually, you can look for ways to reduce some of those basic expenses, boost your income or both.

“After tax,” by the way, means your income minus the taxes you pay. If other expenses are deducted from your paycheck, such as health insurance premiums or 401(k) contributions, add those amounts to your take-home pay to determine your after-tax income.

If you don’t have a steady job or are self-employed, forecasting your after-tax income can be tougher. You can use a previous year’s tax return or make an educated guess about the minimum income you expect to make this year. A withholding calculator can help you determine what you’re likely to have left after taxes.


Automatic transfers can put many financial tasks on autopilot, reducing the effort needed to achieve goals. If you don’t automate anything else, automate your retirement savings to ensure you’re saving consistently.

Also consider saving money in separate accounts — often called “savings buckets” — to cover big, non-monthly expenses such as insurance premiums, vacations and car repairs. Online banks typically allow you to set up multiple savings accounts without requiring minimum balances or charging fees. You can name these accounts for different goals, and automate transfers into those accounts so the money is ready when you need it.

My family typically has eight to 12 of these savings accounts at our online bank. I figure out how much I want to have saved by a certain date, divide by the number of months until that date and send the resulting amount, via automated monthly transfers, from our checking account.


Return to your after-tax monthly income figure. Subtract your must-have expenses, your contributions to retirement and savings accounts, and any extra debt payments you plan to make consistently. What’s left is your spending money for the month. (Nothing left? Try winnowing some of those must-haves or set less ambitious savings or debt pay-down goals.)

In the olden days, you might have put cash in an envelope and used it for your spending money. Once the envelope was empty, you were supposed to stop spending. Some people do that, but in today’s digital, contactless world, you might prefer other approaches.

The easiest would be to put all your spending on a single credit card that’s dedicated to this purpose and paid in full every month. (And since you’re paying in full, consider using a cash back or other rewards card to get some extra benefit from your spending.) Check your balance every few days or set up alerts to let you know when you’re approaching your spending limit for the month. To protect your credit score, you can make payments periodically throughout the month so your balance stays low compared to your credit limit.

Alternatively, you could use more than one card, a debit card or a spending app that’s tied to your checking account, such as Venmo, PayPal or Zelle. A budget app or spreadsheet can help keep you on track. You also could consider setting up a separate checking account just for this spending. Again, many online banks offer checking accounts without minimum balance requirements or monthly fees.

Your budget won’t be perfect and you’ll have to make adjustments as you go. But at least you, and your money, will be headed in the right direction.