As part of my ongoing efforts to Simplify. Everything. – I have reworked our monthly money plan.
Our monthly money plan details our strategies for managing our household finances. The money plan is very similar to a budget – but it also incorporates the use of a calendar and a filing system.
I like for things to be organized. Our monthly money plan keeps us on track, moving towards our main goal, and in control of our finances.
Our Income Sources -
My wife and I both deposit our monthly paychecks on the first day of each month. This is our regular income.
I also receive money for various part-time work. This is our irregular income.
Our Budget -
We use a very basic zero-based budget to manage our regular income.
Irregular income is used to create a secondary budget – for things like vacation planning, reducing our mortgage principal, and longer-term savings goals.
Our Big Goal -
Currently, we are working to pay off our home mortgage in less than ten years.
Our Monthly Money Plan -
Step 1 – Paychecks are deposited at our local bank on the first day of each month.
Step 2 – Cash for monthly expenses is placed into our envelope system.
Groceries for us and gasoline for our automobiles are purchased each Monday – using the cash from the envelope system.
Step 3 – Bills are paid. It’s very simple to locate and pay these bills. They are either bookmarked in my web browser for easy access – or in our bills to pay file folder. We pay our bills online via our primary checking account.
Step 4 – Paperwork associated with bills is filed.
Step 5 – Deposits, withdrawn from our primary checking, to our online savings account, are scheduled.
Step 6 – Deposits, withdrawn from our primary checking, to our Roth IRAs, are scheduled.
Step 7 – Extra, principal-only payment is made to our mortgage provider. Click to see our debt reduction progress!
Step 8 – Irregular income is deposited, as received, into our online savings account.
Step 9 – Budget needs for the upcoming month are discussed and budget is updated.
Step 10 – Mid-month and again at the end of the month, I check to see that all payments have been received and deposits have been credited.
Step 11 – Charitable donations are made.
Step 12 – We balance our check book. This takes about two minutes – because our bills have all been paid and we use cash and debit for 95% of our off-line purchases.
Once a Quarter -
I check on our retirement accounts and make any adjustments that I feel are necessary.
Once a Year -
I review all insurance policies, to insure correct coverage and good rates.
That’s it. That’s our monthly money plan. We make deposits, use cash, pay our bills, work hard to earn a little extra now and then, build our savings, and reduce our debt. It’s very simple and very basic – and it works for us.