"Budget" is not a new term, but, one that is applied very differently in A Real Budget. Traditional personal budgeting ... monthly or payday budgeting ... is the micromanagement of the dollars expected to be received in the next paycheck. That is not how A Real Budget works. Instead, the program is based on the definition of a budget:
"A budget is an estimate of income and expenses for a specified future period."
In A Real Budget you manage your income, out-of-pocket cash, bills, credit cards, sinking funds and savings in one automated spreadsheet for up to twelve months. The rows and columns in your budget are automatically populated by A Real Budget using the descriptive financial information that you enter for the six parts of your everyday finances.
Each Budget group can be expanded to drill down to the budget details.
There are two dated columns for each month in the budget which default to the 1st and 15th. You can adjust the default column days to better fit your cash flow situation.
In each dated column are listed:
The column dates in your budget are the dates on or about which you pay bills:
As shown in the above illustration, the next date on which you will pay bills is the column highlighted in salmon. This next date column disappears as soon as you are done paying bills for that date.
Net Cash Flow
Near the bottom of your budget is the row that shows the calculated "Net cash flow" for each column: income minus expenses and set asides. The net cash flow numbers indicate the direction of your spending plan. A net cash flow that is negative (red) indicates that on that column date you plan on spending and setting aside more money than will be available.
Being able to see a twice monthly net cash flow for the next twelve months is the main benefit of using A Real Budget. You can foresee shortfalls in your spending plan and make adjustments before they become problems.
When you pay for something with cash, you are using your spending money. Spending money may seem like an unimportant part of your day-to-day finances; however, controlling your spending is one of your top priorities for effectively managing your finances. Failure to control spending money is typically the main reason that people get in trouble with their finances. In A Real Budget, you eliminate the disasterous effects of uncontrolled spending by giving yourself a weekly allowance. Doing so gives you:
The "Allowance set asides" row in your budget shows how much you are budgeting for spending money each month. You decide how much you want for cash each week and the weekday when you get your allowance. A Real Budget uses your choices to calculate how much to set aside for each month.
Playing "What if?"
Another powerful benefit of using A Real Budget is the ability to play "what if?" with anything in your budget. You can temporarily add, delete or modify any budget item to see the affect on your net cash flow of a financial change you are considering such as:
Making good financial decisions is much easier when you can see the affect of a change in your spending plan before you commit.