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If you want to know how to do a personal budget the right way, first you need to understand what the wrong way is. The wrong way to do a personal budget is to not do one at all. Just doing your budget in any way that makes sense to you will put you far ahead of the average person who tends to fly by the seat of their pants more often than not when it comes to money.

There is a very common budgeting method used by many persons (and software programs) that can goof you up – forcing everything into a monthly interval. For example, many people are paid every two weeks; this can lots of confusion for a monthly budget. You get an ‘extra’ paycheck twice a year, sort of, when you’re paid bi-weekly. Some bills or other expenses may come quarterly or in some other non-monthly interval. The best, most exact way to deal with all of these variations is to create a spending plan that is based on day-to-day cash flow, and not get too hung up on creating a rigid monthly budget.

Doing your personal budget the right way is really about avoiding the confusing pitfalls that can goof you up. Doing a budget based on a monthly interval is an easy way to get started and is infinitely better than not doing a budget at all, but if you want to get it exact, a good, day-by-day cash flow based spending plan just can’t be beat.

About the Author: Brad Homer is focused on helping others achieve their personal and financial goals. His website hosts personal finance articles like this one and his free-to-try software, Millionaire 2020™, which can help get you on the path to good budgeting fast.