Even if you didn’t participate on Monday, there’s still time! Go ahead and join in. I’m going to do a round-up of what the participants (you!!) had to say at the end of the week.

If you have a budgeting system that completely works for you, great! Tell us about it! Write a blog post, link back here, and post your link in the Mister Linky function below.

If you don’t have a budgeting system that works for you …

… this is the week to explore your options and choose a way to budget. You might not find a perfect match the first time around, but you’ve got to start somewhere.

If you participated in the first Better Budget Challenge, then you’ve already written about the type of budgeting system that you think will work best for you.

Choose a system that best matches the needs you’ve outlined.

• If you would like a starting point to help you consider some budgeting programs, visit my post here.

IMPORTANT:

No matter the budgeting system you choose, you’ll have fixed expenses and flexible expenses.

Your fixed ones include rent, cable, etc.

The flexible ones include groceries, entertainment, etc.

Until you have tracked your flexible spending patterns, DO NOT set fixed amounts for your flexible spending categories. DO NOT say, “Hmm, I think I’d like to budget $250 this month for groceries.” You’re picking a number without considering your past shopping history that way. Not good.

Instead, establish your categories and keep track of how much you’re spending. Try to be frugal and keep your spending under control, but if you haven’t yet tracked your expenses, you’re not ready to put a dollar amount on those flexible categories.

Once you see how much you spend in real life (not on paper), you can use those dollar amounts as benchmarks to beat.

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Now, on to this week’s challenge:As I said, if you already have a successful budgeting system, tell us about it.

If you’re ready to set up a budget…

1. Decide on the budgeting system you’re going to use.
2. Set it up! Upload your account information and start putting your system to work.
3. Tell us why you decided on that budgeting system.
4. How easy or hard was it to set up? How long did it take?
5. If you think other people could benefit from your system, tell us why. For example, you could say, “I think this system works best for people who pay bills electronically and only use their debit cards.” Or, “This system will work well for multiple spenders, such as a husband, wife and older children,” etc.

Ultimately, your system has to work for you. Whether you use a spreadsheet, pencil and paper, or a software program, it has to be something you’ll stick with. If you don’t use it, what’s the point?

Blog about your budgeting adventures, link back to this post, and then put your link in the Mister Linky below. NOTE: Don’t link back to your blog’s main page–link to your specific post. If you don’t, I’ll delete your entry in the Mister Linky thing, and you’ll have to submit it again.

Estimated time of this challenge: 45 minutes to an hour or more

Estimated effort level: Moderate to high - shopping for a budgeting system and then setting it up

Estimated benefit: High - You’ll have a budgeting framework set up. You’ll be able to track your monthly expenses and start to decrease your spending. Also, your responses can help others learn from your experiences.

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Why am I doing this year-long challenge? You can read my introductory post on it here. I want to reduce our household expenses to their lowest possible levels, while still having our needs met. Before I can effectively reduce any particular expense, I need to know how much I’m spending on those things already. We’ll start with establishing budgets that work for us, and then together, we’ll tackle ways for cutting our expenses. I hope you’ll join me!