If you've been reading An Uncommon Way to Wealth for any length of time, you know how I've been on the eternal quest for "the perfect budgeting system". For the past six months, I've been successfully resisting the urge to try out another budgeting system, and one in particular was tempting me. It's called The B Word, and it finally got me to break a six-month streak. Don't worry, though - I'm not making my wife switch to a new budgeting system, so I'm keeping my promise to her.

"The B Word" obviously refers to that six-letter word that most often causes people to respond with colorful four-letter words. I'm speaking, of course, of a Budget. The creator of The B Word, Lee Roesner, has a kind of ironic attitude towards budgets in general.

In fact, at the top of his website is a picture of him cringing in horror at the terrible Budget Monster that seems to be staring him down (check out the picture to the left). That was actually what got my attention all those months ago when I first read about The B Word. I figured that if this guy hated budgeting as much as most people do, then the system that he created and uses himself must be something out of the ordinary.

I've read through Lee's bio on his website. He's actually not in the budgeting business - he's a self-employed graphic artist. He says that the reason he even thought about creating a so-called budgeting was that one day, about 17 years ago, his wife threw her hands up in frustration about their finances. It wasn't that they didn't have the money to pay the bills, he says, it was just that they didn't have it then. Theirs was more of a problem with cash-flow timing than an overspending problem.

Each budgeting system has a method for handling the cash-flow timing problem. The first budgeting system that I used, Microsoft Money, handled the cash-flow timing problem by just ignoring it. Sure, MS Money lets you automatically enter paychecks and such, but its budgeting feature doesn't really let you take into account the nature and timing of your cash flows.

Mvelopes Personal is much better for budgeting than MS Money, but still has a little trouble with the timing of cash flows. There's a way to overcome this limitation, but it requires using a YNAB-like buffer approach (see the next paragraph for an explanation).

You Need A Budget (YNAB), which is the system that my wife and I use, handles the cash-flow timing problem in a neat way, by requiring you to build a buffer in your bank account equivalent to one month's expenses. Any cash-flow timing problems are absorbed by the buffer. The only problem though, is the self-discipline required to build the buffer in the first place.

In contrast to all of the other systems, The B Word uses a simple mathematical principle that any fifth-grader knows and understands: Averaging. The B Word keeps an eye on your average income and expenses, rather than the volatile and greatly-fluctuating monthly or daily amounts. I call it "looking at the forest, rather than at the trees".

When you look at your financial monthly averages rather than the individual monthly amounts, you effectively smooth out the financial ups and downs. For example, if you know that you spend $3,600 a year on groceries, your monthly average is $300. If you set aside $300 a month for that expense, it doesn't matter whether this month's grocery bill is $325 and next month's grocery bill is $275, because it averages out. The same goes for your income - smooth out the bumps by averaging.

The budgeting process (or maybe it should be called a "cash-flow management session") is equally simple. You schedule two days a month to sit down and review your finances. Each time you sit down, you perform the same cash-flow management steps, with very few variations. Then you get back to living your life. I like the way Lee describes the results of using The B Word:

…you'll find that money management doesn't become a second career or even a part time hobby…but instead, like walking, falls to the background of your mind and becomes totally inconspicuous in your life.

Lee is right about money management becoming a part time hobby, at least for me. Admittedly, I like it, but most people would love to manage their money with more ease and less time investment.

Like every budgeting system, The B Word has its advantages and disadvantages. Here's the list I came up with:
Advantages:

• Ease of use - With The B Word, you're using a spreadsheet-like format that is very straightforward. It comes with a manual that explains everything you'll need to know to use the program.
• One-time cost - Some budgeting systems, such as Mvelopes Personal, require you to pay a monthly fee. I dislike paying an ongoing fee for anything, so this is a big plus in my book.
• Product support - I emailed the creator of The B Word, Lee Roesner, and he got back to me the same day. He's a down-to-earth guy who actually provides product support for his own product. What else would you expect from a guy who puts his own name and face on his product?
• Money-back guarantee - I don't see why you'd ever need this, but it's comforting to know that it's there. There's no risk to try it out, and 90 days to put it through its paces.
• Unique financial averaging system - Like I described above, I haven't seen this method of "smoothing out the bumps" anywhere else. MS Money doesn't have it, Quicken doesn't have it, and they should - it's that good.
• Streamlined system - Gets rid of most of the time-consuming tasks associated with other budgeting systems, reducing your "cash flow management sessions" to just a few minutes a month.

Disadvantages:

• Lack of connectivity - Because of the unique nature of The B Word, you don't really need integrated access to your online financial accounts as you do with Mvelopes Personal, so I'm not sure how much of a disadvantage this is.
• Newest version isn't available for Macintosh - Only an issue for Mac users. Note that the older versions, which work on Macintosh, still have the same functionality as the new version. The only difference is that the older version requires spreadsheet software such as Excel or Appleworks, whereas the new version available for PC is a standalone program.
• Totally different than the usual budget - Let's face it, when you get The B Word, you'll have to adapt to something different than you're probably used to. Seems a small price to pay for the benefits, though.

Conclusion:
The B Word is a unique, well-conceived cash-flow management system. I can't truly call it a budget because it doesn't feel like a budget - it's too easy to use for it to be a "budget". Judging from my own evaluation of it, as well as the numerous user testimonials at Lee's website, it works well in a wide variety of situations and with widely-fluctuating cash flows. If you're a Mac user, you'll have to use the older version, but it does the same thing as the newer version.

If you want to see what all the fuss is about, here's a link to Lee Roesner's "The B Word" website.