Budgeting. We should all do it. Naturally, with these things that we should be doing, it can be a real pain in the ass. I’m not talking about tracking every penny, I’m basically talking about not spending more on good food and beer than you need to spend on rent and electric. After getting into David Allen’s Getting Things Done system about 2 months ago, I became aware of this personal budgeting system, known as StackBacks. Like GTD, it’s a very simple and powerful idea. Here’s the basic gist:
“You shouldn’t have to think about your budget. Figure your budget out once, not constantly. I want to pay my bills on time, reach my financial goals, and have money I can spend without worrying about it.”
So how do you do it?
Well, there are essentially 2 types of expenses, planned expenses like rent and utilities, which are mostly constant, and living expenses like clothes, groceries, books, entertainment, etc, which can vary, but should never be more than what’s leftover after your planned expenses are taken care of.
StackBacks proposes that you set up a 2nd checking account. Use one for planned expenses and one for living expenses, and set up direct deposit and automatic payments where applicable to take care of planned expenses
Greg, the guy behind StackBacks has received a lot of praise for the system and is organizing a “4-Week Challenge to Master Your Budget“. I’m doing it. I’m sort of already doing it, but this exercise should help me iron out some kinks… Like how do credit cards fit in, and how to plan for saving.
More:
StackBacks.com
The StackBacks White Paper (PDF)
The Challenge