Complete Finance Blog

My current system for managing our household finances is super-simple.  Here’s the entire process:

Monthly Review

On the last day of each month, I review that month’s budget, income, and expenses.  I make a note of any budget overages or shortfalls  I also balance our checkbook.

Budget Creation

After reviewing our budget, I use the awesome You Need A Budget software to create a zero-based budget for the upcoming month.  Usually, the changes to the monthly budget are minimal, but it never hurts to review and fine-tune.

Income Deposit

My wife gets paid on the last day of the month, and I get paid on the second Monday of each month.  I wait until the first Tuesday of each month and deposit both checks in our local bank.

Income Distribution

Bills - I pay all of our bills online, using free bill pay, and schedule all bills to be paid on the second Wednesday of each month.  A couple of our bills are on auto-draft, but most are paid using online bill pay.  We know longer write paper checks to pay bills.

Food / Groceries / Gas – We use the envelope system for managing our cash.  Here’s a video I made, explaining the system and how it works.  I also use a debit card for certain expenses, but prefer cash.

Savings – On the second Wednesday of each month, a portion of income is deducted from our bank account and deposited in our online savings account with ING Direct.  The amount to be deposited is determined by our current long-term savings goals.  Currently, we are saving to replace two automobiles and to buy a new kitchen table with chairs.

Final Thoughts

That’s it.  I spend about two hours on the last day of the month working on  the budget and making any necessary changes to our bill-payment schedule.  Once in a while, I’ll have a random bill, something like a car tag fee, that will have to be paid out-of-pocket.  Oh, yeah.  I have to make the three minute trip to deposit our checks, once a month.  Direct deposit is unavailable.

Contributions to our retirement accounts are automatically deducted from our paychecks.  A couple of times a month, I’ll clip coupons and update my grocery price book, and I frequently log in to our various accounts, just to make sure all-is-well.  Oh, I also spend a couple of minutes, each month, filing away payment stubs and balancing the checkbook.

Keeping things super-simple works for me.  In the past, I struggled with disorganization and procrastination, especially when it came to dealing with bills.  Now, I have a fool-proof system in place, one that keeps me organized, assures that my bills will be paid on time, and still allows me to relax and enjoy my life.

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