A good system is only as good as its user.

I’ve always thought Microsoft Excel was an okay program. It seemed rudimentary – what could it do that I couldn’t do with a calculator, Microsoft Word, or just with a pen and paper? It’s only recently that I’ve discovered (by watching others use it) how incredible Microsoft Excel is.

A good system is only as good as its user. If the user doesn’t understand the functionality or use the system as it is intended, they might think the system is faulty – just like I thought Excel was.

Budgeting is itself a system. Once you’ve created a good budget, if you don’t use it properly, then you can’t blame it for unsatisfactory results. Instead, you must identify the problem—is it the system or the user?

With a good budget, you create boundaries. Those boundaries are ones that you set ahead of time. They are (hopefully) based on reality, intended to help you achieve your goals and honor your values, and spend below your income. If your spending stays within your boundaries, then you are using the system well.

The system of budgeting is a two-part process. First, you must create the budget. This is a money resource plan written down – either electronically or on paper (i.e. not kept in our heads!). It accounts for both your income and your expenses. Without accounting for your income, you don’t have a way to know that you are spending within your means. When it comes to capturing your expenses, you must acknowledge all your expenses, plan ahead, and account for your goals. The second part of the process comes when you’re actually spending your money. You must make sure that what you are buying was already in the budget. If it wasn’t, then it’s simple – you don’t buy it (at least for now!).

To use the system well, you must frequently check in with the written budget and ensure that what you are spending is still in line with what you wrote down. Sometimes, you check ahead of time (can I buy these shoes? Did I budget for them?). Sometimes, you check after the fact (how much have I already spent on groceries this month? What do I have left for next week?). If you have a good system in place and you’re using it properly, it can truly incredible.

Do you have a good system in place? Are you using it well?