Not everyone relishes the idea of proactively managing money and maintaining a budget. However, creating a budget -- and sticking to it -- are key first steps toward reaching financial goals large and small.
What's more, selecting the right budgeting tool can make or break your ability to follow a spending plan. "It's got to be a part of your life if you want to achieve (your) goals," says Paul Miller, CPA and owner of New York City-based accounting firm Miller & Company LLP.
From old-school methods to the latest apps, here are 10 simple and free budgeting tools to keep your spending on track:
-- Pen and paper.
-- SoFi Relay
-- Personal Capital.
-- Banking Tools.
[READ: How to Save $1 Million.]
Pen and Paper
While budgeting apps and software are popular, you don't need anything more than a pen and some paper to write a budget. The basic budgeting process involves writing down all your expenses, from monthly bills to small discretionary purchases such as morning coffee or lunches. Then, categorize those expenses according to whether they are needs or wants. Next, add up your income. Earmark your income for your needs first and any money left over can be spent on wants.
If your expenses exceed your income, you'll need to determine what changes to make. You may be able to balance your budget by cutting out wants such as dining out or a gym membership, but in some cases, you may need to consider more significant changes such as moving to an area with a lower cost of living.
An envelope system involves placing cash into envelopes marked for major budget categories such as groceries, clothing and dining out. It makes it easy to see how much money is available for each spending category.
"The envelope method is a great tool for budgeting because it forces people to take control of their spending with cash in hand," says Howard Dvorkin, CPA and chairman of Debt.com. When money in a particular envelope is gone, it signals that no more spending should occur in that category until the cash is replenished.
For a highly customizable way to track income and expenses, use a spreadsheet. "People can download budgeting spreadsheet templates that come formatted with formulas, dates and labels," Dvorkin says. "This method helps take the guesswork out of organizing a budget, and it can also make it easier to edit a budget and track income."
Both Microsoft Excel and Google Sheets offer free budget templates to users. You can also create your own, though there can be a learning curve to using the programs. Microsoft provides free online training lessons on its support website for Office products. Otherwise, plenty of tutorials can be found on YouTube.
For those making a budget for the first time, a worksheet can eliminate some of the guesswork. These papers typically have recommended percentages to indicate how much of your earnings should be spent on each category each month.
One organization offering free budgeting worksheets online is American Consumer Credit Counseling. The nonprofit credit counseling provider has sheets for household budgeting, expense tracking and budgeting for specific needs.
No list of free budgeting tools would be complete without mentioning the many free budgeting websites and apps available today. Mint may be the most well-known of the internet and smartphone-based budgeting applications, and it offers comprehensive services at no cost.
Mint users can link multiple financial accounts to the service, which then tracks and categorizes spending. It includes a payment tracker with bill reminders, and its calculators allow people to see how their decisions may impact progress toward goals.
SoFi Relay is another free budgeting app. It allows users to link accounts, review balances and set spending targets. It aggregates accounts and makes it easy to review spending by category. "SoFi Relay allows members to understand everything they own, owe and spend from the palm of their hand," says Brian Walsh, a certified financial planner at SoFi, a personal finance company.
The app also provides access to VantageScore 3.0 credit scores and makes it simple to connect with a professional to discuss financial goals and strategies. SoFi Relay users are entitled to a complimentary 30-minute call with one of the company's in-house financial planners.
This savvy budgeting software is intended for those who like the idea of an envelope cash management system but don't want the hassle of carrying physical envelopes.
Instead, Goodbudget lets users fund virtual envelopes that are used to track expenses and sync and share budget information across devices. The free version includes 10 regular envelopes, 10 more envelopes, one year of account history and access to community support forums.
Personal Capital isn't just for budgeting. In addition to automatically tracking and categorizing spending, the app allows people to review investments and manage retirement accounts.
"Users can get a complete picture of their money by seeing all of their finances in one place, including their investments," says Scott Schleicher, financial planning specialist group manager and senior financial advisor at Personal Capital, an Empower Company. He notes that people can use the free tool to view their net worth, organize spending and track progress toward goals.
Designed with millennials and zoomers in mind, Albert can be a good choice for those who are new to the world of personal finance. The app analyzes spending habits, helps users create a budget and identifies where savings may be found.
"Albert is a great go-to app to help you budget, track your spending and save," says Trina Patel, financial advice manager at Albert. The budget interface provides a simple way to see a snapshot of your current financial picture, she explains. While the Albert app is free, users can receive personalized guidance for as little as $4 a month.
Free budgeting tools may be as close as your bank's website. Bank of America, Chase and even local credit unions are among the institutions to provide customers budgeting resources that can track expenses, run spending reports and export data to spreadsheets or computer software.
"You don't have to be tech savvy to use bill pay," Miller says. By paying bills online, banking tools may create charts and graphs that categorize spending. "That in and of itself will give you a budget." Banks may also offer other tools that aren't specific for budgeting but can be helpful to manage money. For instance, you may be able to set up automatic transfers to savings or receive alerts when account balances are low.