Budgeting for Lazy People

By Dayana Yochim

In matters of budgeting, there are two clear camps of consumers: them, and the rest of us.

They are the people you ask to calculate what everyone owes when there are more than two of you dining out. They know exactly how much they spent on ATM fees last week, last month, and last quarter. They balance their checking accounts down to the penny. Daily.

The rest of us? Well, we swear that tomorrow, we really are going to sit down and make a budget. It's not that we don't mean it -- it's just that we have issues with following through.

The secret to setting up a budget you'll actually follow

If nothing else, remember this one simple budgeting rule: Spend less money than you make.

Now that you've memorized that line, let's fine-tune that advice. Procrastinators, you can rejoice: There is such a thing as a budget that you can stick to. What's the secret? Take every shortcut possible.

Since money advice is our full-time jobs, we've been through the budgeting process enough to spot the corners that can be cut and the steps that can be skipped. The Fool's Lazy Budget still requires some prep work (hey, we aren't miracle workers), but we've streamlined the process so that you can start seeing results right away. After all, we don't want you to set up a budget, only to abandon it a few weeks later.

The purpose of this budget is to come up with a system to govern everyday spending. We're leaving out housing, insurance, and the all-important savings categories for now.

So let's start corralling your cash flow, Fools:

Step 1: Take a snapshot of your spending

Every budget starts with sniffing out your spending habits and determining exactly where your money goes on a day-to-day basis. Don't skip this step: After all, if you don't know how much you're spending and on what right now, you can't decide where you want to spend and on what from now on.

You can do this the hard way -- tracking your spending for three months, inputting every expenditure in a 218-category spreadsheet, then spending nights poring over the data -- or you can do it the one-step way.

The one-step way it is! For those who do most of your spending on one credit card (paid off in full each month, right?) or with a debit card, review the raw data your bank provides on your monthly statement, and come up with general categories for spending areas in which the amounts you shell out make you shudder. It's even better if your financial institution provides a year-end spending summary, with your weak spots fully graphed in four-color bar charts.

If most of your spending is done with old-fashioned cash, go about your business as usual for one week -- just write down all of your expenditures. Then project the results over four weeks. Now you have a rough idea of where your dough goes. As stated above, pinpoint the big categories where your overspending occurs.

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