You Need A Cash Plan and budgeting have the same purpose: enabling you to direct your income toward what you really want in life, including having fun.
The differences between managing cash flow with You Need A Cash Plan and budgeting include:
To put what you are comparing in perspective, click here to first take a quick tour of You Need A Cash Plan.
Budgeting
You Need A Cash Plan
Focus of the process
How you will spend the dollars in your next paycheck.
How you will be using your income twice monthly for spending, bills, credit cards, sinking funds, and short- and long-term savings.
How far out you can see how you plan to use your income
Next payday or month.
Twelve months.
Available tools
Budgeting apps, budgeting websites, spreadsheet templates, paper envelopes, envelope apps, banking apps, personal finance budgeting software, pen and paper, printable budget planners.
Works for everyone.
Exposure of data to online risks
Tools connecting to online accounts require account numbers and passwords.
Does not connect to anything on the Internet. No account numbers or passwords are used.
Getting started
1: Calculate your income.
2: Track your expenses.
3: Set financial goals.
4: Choose a budgeting method (50/30/20 rule, zero-based, envelope system, etc.).
5: Choose a budgeting tool.
6: Create your budget.
7: Monitor and adjust your budget daily, weekly, and monthly.
1: Choose checking account.
2: If needed, add a cash plan.
3: Add holidays.
4: Add outgo categories.
5: Build cash plan (add income, credit cards, bills, allowance).
6: Choose a start date.
7: Pay bills the first time (calculate startup allowance, initialize checking account balance, initialize credit card activity, pay bills).
Ongoing activities
Daily: Keep track of your spending by category. If you don't have an emergency fund, use credit cards to pay for unexpected expenses or to buy expensive items.
Weekly: Track spending, check if you are staying within category spending limits, adjust for any overspending.
Monthly: Compare budgeted vs. actual spending, adjust for upcoming expenses, rebalance spending categories if needed, review financial goals.
Enter deposits.
Balance checking account.
Get weekly allowance.
Adjust next bill payments.
Pay bills twice monthly.
Enter credit card charges.
Reconcile credit card statements.
Add/use sinking funds.
Add/use short-term savings.
Add payments to long-term savings.
How success is measured
Current spending is within current category limits.
Program calculated twice-monthly net cashflow is positive (you are living within your means) or negative (you are planning on using more money than you expect to have available).
Tools available for measuring your financial health
* Debt-to-income ratio
* Net worth
Saving calculators
* Annual percent yield
* Annuity - ordinary/due
* Annuity - growing
* Annuity - payment
* Annuity - solving for n
* Compound interest
* Simple interest
* Doubling time
Options for creating payoff plans for debt
* Consolidation loan.
* Custom payoff plan for one debt.
* Custom debt snowball for multiple debts.
* Custom amortization plan for a credit card with a high balance.
How to play "what if?" with changes you are thinking about
Help with tasks involved in managing your household finances
* Automatic transaction register.
* Use transaction files downloaded from any bank, credit union or credit card website.
* Semi-automatic balancing of checking account and reconciliation of credit card statements.
* Percent of income, fixed monthly amount, or unscheduled set-asides to short-term savings.
* Automatic emergency fund.
* Link payments to sinking funds and savings for automatic use of set-asides.
* Keep contact and login info for bills, credit cards, persons, and companies.