Budget, Money Management

I Spend One Day Managing Finances And Then Enjoy The Month

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 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.  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.

4 thoughts on “I Spend One Day Managing Finances And Then Enjoy The Month

  1. Money for clothing is in an envelope. I should have put an “etc.” in there, where it talks about gas, groceries, food…

  2. I have something similar to your system except I don’t use cash so my ‘envelopes’ are online in a spreadsheet. I set up my budget which really only changes a couple of times a year when there is a major event and just need to make small tweaks on a monthly basis.
    I also have all my bills set up to be paid online but they all go on specified credit cards (I use two different ones) and then ING is set up to pay those cards every week based on the budgeted amount, not actual purchases. This way I never carry a balance and never have a late payment and earn cash back on my cards.
    Savings are automated as well in ING and are set up as a ‘bill’ in my budget that gets paid just like all my other bills so that I have no excuse for not saving.

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