Setting up a budget and sticking with it is hard work. But implementing a budget is a fundamental requirement for achieving your financial freedom. How do you maintain the discipline needed to stay on your budget? How do you keep your long term financial goals in mind when they're so far off in the future?

The answer to that is in your budget itself. The key is to build a pressure relief valve into your budget - sort of like a pressure cooker.

A pressure cooker is a cooking pot with an air-tight lid. The tight closure allows for very high cooking temperatures. The problem with cooking at very high temperatures in an air-tight container is the possibility that the internal pressure will climb too high, causing the pot, dinner and all, to explode in your kitchen. That's why pressure cookers have pressure relief valves to allow them to "blow off some steam".

It's the end of February. I've been using the free open source personal finance software, gnucash, for nearly 3 months now. I thought today would be a good time to show you how I intend to use gnucash to manage my personal finances, in particular how gnucash handles my budget.

The image you see here is a screen capture of my budget category report in gnucash. You can see the full sized image by clicking on it or my clicking the Read more link below. The data itself isn't important. I set the reporting date to December-06, which was the month I started using gnucash. Some numbers represent the full month. Others do not. As you can see, this is only a partial view of the entire budget.

What is important is the layout, clarity and utility of this elegant gnucash report.

Layout and clarity

Here we are at the last article in my series on building a better budget. In the first article, Budgeting, your key to personal financial growth, we looked at the importance of having a budget in the first place - why it's important to have one at all, and what it can help you to achieve.

My second article, Getting to the Details looked at how I use categories to track incoming, saving and expenses important to achieving my own financial goals. Here I showed you the framework I use to track my own finances as a starting point for your own budget.

My third installment dealt with putting your budget to use - how you can go about using my method in your own life. The key benefit illustrated here is that the proper budget for your unique lifestyle can not only be an effective tool, but also stay out of your way. After all, nobody wants the process to be a burden. That's a sure fire path to giving it up as a failure.

In this article I want to discuss with you how I go about using this budget methodology over the long haul. After all, budgeting isn't at all a short term thing. Paycheck to paycheck and month to month are relatively simple things to manage. It's the long term we're after here. We want to be financially secure and we want to have a nice car and a decent place to live. But we don't want to force ourselves to live like paupers, saving every last penny, in the process.

The secret to managing your long term financial future with your budget is in top-down planning. Remember our categories?

It's time to wrap up this mini-series on budgets and budgeting.

To recap: In the first article on better budgeting entitled Your key to personal financial growth I discussed some of my philosophy behind using a budget to pro-actively manage your financial situation. The second article, Getting to the Details, discussed putting the overall framework for your budget in place. In this article I'll show you how I use that framework to ensure my family's financial health and well-being.

The key to effective use of the budget categories I described in part 2 and shown here

Today I thought I would continue on with my introductory article about building an effective budget. In this article I'll lay out the categories I use to manage my family's own personal financial picture.

Below is a screen grab of the categories I use.

Budgeting is more than a method. Budgeting is a philosophy.

My experience discussing budgets and budgeting with friends and colleagues tells me that while many understand the method, few really get what budgeting is about. If you don't really understand how to use a budget effectively, you cannot manage your personal financial growth.

Fundamentally, your budget is the best tool at your disposal for understanding where your money goes. Your personal financial budget keeps track of money flowing in at the top and all your various expenses flowing out as you go down the list of budget categories. Your paycheck or net receipts - anything that is your income - are the fuel for your personal financial engine. The budget categories are the cylinders of that engine where your income is consumed in the process of running all aspects of your life.