Financial “Did You Know?” From Thrive Financial Counseling

The difference between budgeting and bill tracking

Both are important and necessary, different but go hand and hand and one without the other, makes for a challenge when trying to get right with your money.

A budget is a clear, realistic and useable plan for your money. It includes every cent of income and every cent of expenses. It includes an estimate (based on experience!) of the monthly cost of groceries, gas, eating out, clothes and so on (picking those few as they are usually the easiest to spend in!).

A budget is the process of putting a name to every dollar, in the interest of: making financial goals you have set, utilizing your income better and sometimes, because you have over spent – you have decided to do better, which the first step would be, making a budget!

Bill tracking (or a budget tracker) is using your budget to stick to those goals and plans!

For example, if you make a budget, all income and expenses are accounted for, and you make a plan to follow this every month. How do you do that? Of course, a checkbook register or use of online banking, can make sure you have not gone into overdraft – that you are sticking to your income, but you need a process to stick to your BUDGET.

If I have $300 set aside for groceries, every time I go to the grocery store, I log or list those expenses under the food category. When it is the 25th of the month and you only have $30 dollars left in the food category, you are limited for a week to that $30. If you reach to another category, you might keep yourself from: paying down extra on debt payments, saving for emergencies or vacations.

A budget without tracking, might leave you where you were before the budget – frustrated and out of money.

On the same page, if you track your bills without a budget – what are you actually tracking? Besides, like before, making sure you do not overdraft, tracking your bills can show you how much you spend in every category, to set up a budget BUT if you do not take that last step, its like running in place, you will get no where.

Need a budget, a bill tracker or both? I would send you my budget and tracker documents, but one thing doesn’t work for everyone. I suggest you go search both budget template and budget tracker, to find two that work for you.

If you want to know more about budgeting, The Only Budget Book available through my website is a great resource. If you get stuck, reach out through facebook as well, Thrive Financial Counseling.


By: Lauren Welch, guest blogger, military wife, mom and owner at Thrive Financial Counseling

(pictured right)