What is my effective budget? We use a budget worksheet, if you need one, we just so happen to have a free one available here. At the start of the year, everything is laid out for that entire year. We have a separate tab for each month. Each month is then broken down by pay periods in that month. We utilize every cent for each pay period, and separate the funds. We have found what works best for us, is to have a separate account for each category, i.e an account for entertainment, gas, a bill account, each of us have a personal account, and different savings account. The bill account holds the funds for any bills we have, power bill, cable, cell phones and so on. Why different savings account? Long term savings, so an emergency fund for any surprises. Short term savings for want items, like a vacation, new car, or anything else that we suddenly just can’t “live” without. Short term savings assist with not relying on credit cards and their high interest rate. Having multiple accounts help us have an effective budget because there is always money for our everyday items. This also prevents errors, or those oops moments. Ever pay a bill, then forget about it. Literally forget, bank transactions typically take a couple of days to clear…especially if the payment is processed on a Friday. Thinking money is in the account, it gets spent again, which may cause an overdraft fee, and headaches. By having separate accounts, that becomes a non issue. That is our effective budget. What works for us, may not work for you. It is important that you select the budget you can work with and personalize, that is effective for your needs. If you are wondering about different budgets, I have a book that can help you. Do your research so that you are able to plan effectively. If the budget is not effective for you, and your needs, it will not be effective for your money.