Everyday Budgeting Tools For Better Money (And Stress) Management

Financial stability can have various benefits, from having enough money to pay for everyday necessities to the ability to splurge now and then without worry. However, money management isn’t always easy—it often takes discipline and planning. Additionally, the pressures of managing money while coping with the fear of having enough to pay the bills and live comfortably can take a toll on mental health. In these cases, one can use methods to address money and mental health challenges, including a tool for budgeting one's spending and income. 

Financial stress is common, but it can be tough on mental health

Talk to a therapist to manage your wellbeing

Key features of effective budgeting tools for money management

Modern budgeting tools offer advanced features, allowing users to gain better control over their finances. For example, an effective budgeting tool may categorize basic expenses like housing, food, transportation, etc., while allowing you to create custom categories that fit your unique financial situation. The app may allow you to allocate funds based on pre-set conditions and adjust budget allocations based on personal needs. Below are other benefits to look for in budgeting tools: 

• An automatic record of transactional data from linked financial accounts for real-time updates
• Notifications when approaching or exceeding your budget limits in specific categories
• Detailed income and expense tracking to monitor spending patterns and identify the most constructive areas for cost reduction
• Forecasting tools that allow you to create multiple budget scenarios, analyze different potential outcomes, and make informed financial decisions
• The ability to set financial goals with target dates
• Calculations for required savings amounts 
• Presented data using visual tools, such as charts and graphs, so you can easily understand spending patterns and progress toward goals
• Tracking for outstanding debts, calculations of minimum payments, and repayment strategy plans 
• Tools to cultivate financial adaptability and flexible budgeting, allowing you to adjust allocations based on unexpected or changing circumstances
• Strong security features like multi-factor user authentication to protect financial data
• An intuitive design that is easy to navigate for users of all levels of financial expertise
• Collaboration features that allow multiple users to access and contribute to the budget collaboratively

From budgeting app to net worth calculator: Top tools for money management 

Paid and free budgeting tools offer different strengths, such as detailed budgeting, zero-based budgeting, simplified spending guidance, and credit monitoring. With so many options, choosing the best budgeting app may be overwhelming. The best budgeting tool for you is a personal choice, but at minimum, you may try to find one that is easy to use and fits your goals. How you integrate the tool into your lifestyle can vary depending on your changing financial circumstances.  

Try a mobile budgeting app 

Whether it’s a paid or free version, mobile budgeting apps can help you track your spending, save money, and achieve your financial goals. However, they may have a learning curve, and some people have concerns about security and safety when using a digital money manager. There are many budgeting apps with unique features to fit your needs. For example, YNAB (You Need A Budget) uses the zero-based budgeting method, which involves allocating every single dollar to a specific budget category. If you’re budgeting with a partner, Honeydue allows you to sync bank accounts, credit cards, and loans and monitor your investments together.  

Budget spreadsheets  

A budget spreadsheet program like Microsoft Excel or Google Sheets allows users to organize and track income and expenses. These budgeting resources will give you a clearer picture of your cash flow by categorizing each source of money coming in and expenses going out. Some people choose to use a spreadsheet template instead of or in addition to a spreadsheet program. A quick online search may provide options for free and paid budget templates. Both methods could offer the benefit of helping you actively manage your finances by visualizing your financial health in one place. 

Envelope systems  

The envelope budgeting system uses cash to help you categorize and control your spending. Like spreadsheets, this option can help you visualize how your money is divided and build better financial habits. To use the envelope system, decide on categories for your spending, like groceries, gas, debt payoff, and entertainment. Then, set aside a monthly amount for each category and put it in an envelope. Use the cash in each envelope to pay for expenses in that category. Once the envelope is empty, you stop spending in that category.  

Benefits of budgeting for families  

Financial stress can be hard to manage for one person, but it can become even more complicated when you add more to the equation. Relationship dynamics within the family unit often influence various factors that impact how people manage money effectively together, such as solid communication, understanding, and problem-solving. On the other hand, managing the household finances together has its benefits, such as the following. 

Reducing money stress

A shared budget plan can help everyone involved clearly understand income and expenses. By tracking expenses and identifying areas to cut back, budgeting tools help families feel more in control of their finances, leading to less stress and anxiety related to money worries. Additionally, adhering to a financial plan can help families avoid overdraft fees or unexpected bills.

Improving mental health 

Maintaining a budget as a family can reduce arguments or conflicts over money. Creating and sticking to a budget can provide an increased sense of control and security, improving the collective mental health of the household. Achieving financial goals within a budget can give a sense of accomplishment and boost self-esteem, positively impacting mental health.  

Fostering collaboration and teamwork in money management

When couples or household members actively participate in creating and managing a budget, it encourages open communication about financial priorities, concerns, and spending habits. A shared budget also promotes transparency, as everyone can see where the money is being spent, which may build trust within the household. Couples can make informed decisions about spending and saving by discussing and agreeing on budget allocations, fostering a sense of teamwork and shared responsibility. Also, managing money as a family encourages shared responsibility among members and empowers the youngest members to learn financial literacy.  

How to choose the right budgeting tool for your family 

To find the best budgeting tool for you, assess your family’s financial needs and goals and consider the most maintainable method. For example, do you think you’ll be more likely to stick with an envelope budgeting system, or is zero-dollar budgeting easier? Think about how intuitive the tool is for every family member to use, balancing simplicity with advanced features. 

Note whether the tool allows multiple people to view the budget and sets parameters around who can change it. Look for a tool that allows you to set and track financial goals and categorize spending by type of income or expense. When you reach spending limits and a debt repayment organization feature, notifications can help you stay on track in real-time. 

Practical tips for maximizing the benefits of budgeting tools  

Once you've selected a budgeting tool that best suits your needs, be realistic about your goals. Establish both a short and long-term financial plan, such as saving for vacation or retirement, and use the tool to track your progress. When you hit your financial goals, celebrate those milestones. Additionally, stay consistent and adaptable to change. Schedule regular family check-ins to review progress and identify trends, adjust spending categories as needed, and make necessary modifications to your financial plans. 

Common financial stressors—From credit cards to cost of living

Economic stressors often differ between individuals and families depending on several factors. For example, younger and lower-income individuals may be more inclined than upper and middle-income individuals to rank personal debt, healthcare costs, lack of money, and job loss among the most significant. Individuals approaching retirement may be more concerned about savings and financial independence after retirement. Essentially, any situation where individuals are worried that they don't have enough money to cover their current and future needs can lead to anxiety about making ends meet. 

Inflation and high cost of living 

According to a 2024 Gallup poll, 41% of American adults cite the high cost of living and inflation as the most important financial problems facing their families. Rising costs of housing, food, and other necessities can make managing expenses difficult, especially on a fixed income. Job insecurity or fluctuations in income can create anxiety about meeting financial obligations. 

The cost of owning or renting a home 

The cost of housing is rising, outpacing income growth for some people. Individuals looking to buy a home may also have concerns about higher down payments, property taxes, and mortgage rates. Uncertainty in the market and increasing rent prices impact everyone in the housing area. 

Credit cards and high-interest debt

The pressure of managing high-interest debt, like credit card debt, can be a significant stressor due to the constant need to make payments and the fear of falling behind. For some people, being in debt prompts increased spending as an unhealthy way to cope with the significant stress. When an individual owes on high-interest credit cards and becomes stressed but then perceives that they need to spend money to cope with the stress, it can lead to a vicious cycle.

Student loans and healthcare costs

Large student loan payments can be a significant financial burden for recent graduates. Unexpected medical bills can significantly strain budgets and cause financial stress, especially for individuals without health insurance. These types of debt are often among the highest, even with a low or no interest rate, as student loan and healthcare bills are typically higher than others. 

Insufficient saving and retirement planning 

Not having enough emergency funds can lead to worry about unexpected expenses. Concerns about having enough money to retire comfortably can significantly stress older adults. Major lifestyle changes like retiring from a job are stressful enough; fears that one may not have enough money to sustain retirement can compound it.  

The impact of financial stress on families

Financial stress can significantly impact families by causing increased anxiety, depression, marital conflict, and poor physical health. Financial stress in the household can also strain parent-child relationships and disrupt children's development, particularly when families struggle to meet basic needs like food and housing. The constant worry about money can create tension and instability within the household, affecting everyone's well-being. 

Managing your budget and your mental health 

Money stress is manageable with self-care and support. To support your mental health, care for your body by eating nutritiously, exercising regularly, and getting enough sleep. Cultivate mental well-being by practicing mindfulness and relaxation exercises like meditation, deep breathing, or yoga. It might be difficult, but try to take time out of your worries about money and partake in an activity that brings you joy. Spend time with friends and loved ones who understand your situation and can offer moral support. 

Financial stress is common, but it can be tough on mental health

Talk to a therapist to manage your wellbeing

Professional support options 

In some cases, people experiencing money problems aren’t comfortable speaking to others about their financial challenges and the resulting stress. The stigma associated with mental health and economic issues can be a significant deterrent. In such cases, support from a mental health professional can be highly beneficial. 

Online therapy through a platform like BetterHelp can be an accessible solution to the barriers individuals may face when seeking mental health assistance. For example, online therapy is often more affordable than traditional in-person treatment without insurance. It’s also more accessible and convenient, and many people feel more comfortable with online therapy's discretion and the ability to attend sessions from home. 

Research reveals that virtual therapy is highly effective in treating anxiety and depression, including anxiety and depression stemming from financial difficulties. For example, preliminary findings by researchers from Ireland and the UK suggest that online psychological intervention “appears to be effective for those with financial difficulties and poor mental health which are impacting one another.”  

Takeaway

Budgeting tools can significantly transform an individual's financial state and reduce the stress associated with financial difficulty. Research the tools available to find one that’s right for you and take the first step toward financial harmony. If you or someone you know is financially overwhelmed and experiencing stress and anxiety, consider reaching out to a mental health professional for guidance. The right therapist can help you cope with financial stress and move forward confidently.