Problem: You look at your finances and you have no idea where the money goes each month.
Ok, I’ve never actually had that problem. Well, not since I started my first job. I’m acutely aware (because I have always been an hourly employee) that money I spend, equals time that I need to work, and while I love my job (well, I do NOW) I would prefer to be at home than at work. This blog will hopefully give you some ideas on how to track your finances.
I am ruthless with our finances — and this is how:
1. I got a tiny version of Quicken with my first computer. I learned that if I input what I spend I will know exactly how much I have and I won’t owe the bank anything in overdrafts. I balance my checkbook EVERY Saturday (sometimes Friday night, if it’s a particularly happening week) and I log how much/where we are spending. I do this for all our accounts, including credit cards and savings accounts. Quicken will even download what’s happening in my retirement accounts.
2. Save, save, save. I’m the queen of worrying about a rainy day. What if it turns into a hurricane, or an earthquake happens DURING the storm? We need to SAVE. I love to have at least 3 months in the bank, and always building towards more. Life often gets in the way of this and while we were paying for graduate school I kissed our emergency fund goodbye in lieu of not having debt, but it’s building again — and making me happy.
3. Drew and I each get an allowance to spend for the month. We take it out in cash and no one knows what the other one spends it on. It keeps us married, and it’s cheaper than a lawyer. Go personal allowances!
4. I use mint to check our balances during the week. That way I know if something’s running amiss. Keeps my OCD happy. Thank you very much.
5. We have a budget (the entire budget can be found here). Drew and I come back to the budget and tweak as necessary (aka, our insurance is going up by 100 bucks this year — yay!) every 3 months. I have a reminder in tick-tick to make sure we do so.
So, that’s my system. #1 is really the heart of the system. I really believe you have to reconcile your checkbook at least monthly according to your statements and online. It helps you be honest with your budget, give away your sunk costs and move on to financial freedom. My husband’s a teacher, I am a nurse and I also have my blog income, we make it stretch and I am working towards at 10% savings goal (possibly even 15 as we need to be thinking about a new car sometime soon).
Do you have anything that helps your financial system? Be sure to check out my financial posts that can help keep your finances on track, including our family’s actual budget. If you’re on Pinterest, you might find my “Cheaper by Me” board helpful!