Budget Kanban

Won’t tell now how I became a kanban user, maybe later, ok? For now if you’d like to know more about #kanban go to http://www.personalkanban.com, there’s lots of things interesting on the topic. Thanks Jim and Tonianne for that!

So, I live with my wife and 2 kids (one more is coming!). I’m always trying to manage our money effectivelly, and read lots of books on finance planning, budgeting, saving. I’ve created lots of logins in online tools to track where my money was going. Also worked on lots of excel spreadsheets in order to have an anual budget.

Unfortunatelly, it never worked for me… 😦

Having used kanban successfully to track house activities and kids chores I started to realize that I could use kanban to try to track my money… maybe it could work!!

But first I had to change my focus to the period when my salary is “active”. In my company we have a 2 week wage schedule, so I defined my “budget kanban” to focus on next 2 weeks only.

So in a white board I wrote down the period in which I was tracking, then how much I have to spend in that period. Lets say 07/01 to 07/15 US$ 600,00 (I’m using dollars here but my currency is brazilian real).

Next step was gather all my debts and bills, write them on post-its and put them on the backlog.

Then I asked (with my wife!) a question: which bills and debts we’re going to pay? So we started to move those related post-its to column “To Pay”. We, as a team, made an informed decision to pay on those bills.

With the rest of money left (“how much I have” minus “sum of bills/debts we’ve decided to pay”) we divided them in categories like groceries/shopping, work lunch, fun, and others. Then we assigned “WIP Limits” or “MIP Limits” for Money in Process to each one of those categories.

After prep phase is over, we started to track our money daily:  creating post-its to put on the categories we’ve created, moving a bill or debt post-it to the Paid (done) column, and checking the overall board to see if we were on course. On most times, we were not on track with our planning. But we were able to see problems very early and make corrections during the period.

Side note: I saw a very common pattern with agile IT projects: execution is not going as planned, make corrections, communicate stakeholders and get it going.

After the period (or near its end), me and my wife sat together and identified what went wrong, what went well. We tried to came up with actions and things we could do to improve our effectiveness. One example is that we created a category named Fun to hold things we like to do (and pay) with our family. Another improvement we’re considering is save some money to an “emergency fund”.

I dont know if it’s the best way to track money, but it’s working for me and I thought about sharing with you guys.

That was the rules I’ve identified so far

  1. Write time period and how much do you have to spend; write it on top of your board (this is your goal)
  2. Gather debts and bills, write post-its and put them on Backlog
  3. Decide colectivelly (your family or team) which you’re going to pay; move those post-its to To Pay column
  4. Create categories to use the money left (eg. lunch, groceries, shopping, fun, saving)
  5. Check your board daily, create post-its to fill the categories, make corrections on the fly
  6. Sat together with your family or team and discuss what went weel and what went wrong; make improvements on your board
  7. Do it again for next period, applying improvements discovered in step 6

I would appreciate your comments!

Later I’ll try to put some photos and elaborate more on this topic.


Um pensamento sobre “Budget Kanban

  1. Pingback: Porquê comecei a usar um quadro para controlar minhas finanças « Desenvolvendo Idéias

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