Friday, November 15, 2013

Household Binder - Finances

This is Part 4 in a series on our Household Binder. Click to read Part 1 , Part 2 , and Part 3.


Our third section in our household binder is Finances. This is where I keep track of all of our bills and check in our weekly/monthly budget. I set aside Wednesdays as my designated day to go through all of this. My goals for this section were:
1. to have a designated place to stick all my bills and financial statements throughout the week, to make sure we don't lose any
2. to have a place to track and monitor automatic payments
3. to make it easy to pay bills quickly and on time
4. to have reminders of monthly or recurring bills that I pay manually

I've done a couple posts on budgeting and finances on this blog before, so I'm not going to go into our full budget process here. If you'd like to read more about how we budget and track our expenses, you can read here and here

Now, I used to be an accountant. And I LOVED it. And everything at my work was organized to the Nth degree. Everything had a system and I knew that everything was in good order. But at home - I just didn't care as much. I don't know if it was because I was dealing with a lot less money, or if I was sick of doing it all day at work but we just didn't do a good job organizing our important documents and staying on top of things. In fact, before I was home full-time, the way we handled bills was to make a pile on our kitchen table until it got so big and overwhelming that we spent one day tackling it. :) Great system right? We paid all of our regular important bills (utilities, mortgage, credit card, etc.) automatically or with a calendar reminder and then we let our "little" bills pile up until we realized we needed to pay them. It was stressful to say the least and not a great system by any means.

Here are some things that have been really helpful for me in wrangling our bill-paying and tracking, recording our expenses:
1. I keep a mini calculator in our household binder. Sure, every smart phone has a calculator already but I've found it's much easier to use a real calculator.

2. I keep a checkbook, stamps, return address labels, and envelopes in the front pocket of the Finance divider so that I have everything I need with me to go ahead and pay those bills.
3. We have a filing cabinet in our office/guest bedroom with a basket on top. When I am done reviewing or paying the bill, I staple a copy of the receipt or my notes to the bill and then place it in the basket on top of the filing cabinet. Then, once a month, I go through the basket and file everything in its proper place in our filing cabinet. If I tried to file every week, I know that I would rush through it and put things in the wrong place so it's easier for me to just set aside time once a month to do a good, thorough, careful job so that I know I can find something when I need to.

4. I made a list of all of our recurring bills and when they get drafted out of our account or when they need to be paid manually - this is the first page of our Finance section, as well as some reminders of what I need to do each Wednesday. This makes me feel SO much more on top of things. 

5. Get paper copies of all your bills. I know everyone lives in the digital age and it's really good to have a digital copy as well, but you should also have a paper copy. Whenever the paper copy comes in the mail, I just stick it in the backside of the Finance divider (see above) and then I have it handy when it's time to review and pay bills on Wednesdays. (I also keep any important receipts or coupons, as well as Rob's pay stubs, here as well).

6. If a bill is paid automatically, I just keep the paper copy in the binder until it is scheduled to be drafted and then I check the drafted amount with the amount on the bill to make sure that the company drafted the correct amount. (If you don't have the time to do this, then you probably shouldn't have your bills automatically drafted.)

7. We took Dave Ramsey's Financial Peace University class at our church and I put some of the worksheets that we found helpful in the Finance section of our binder so that we can easily use them and reference them.

So what do I do every Wednesday?
-Sort through bills - this is where I organize all the bills that I stuck in the binder as they came in throughout the week.
-Pay any bills coming in through mail - Go ahead and pay any bills through a check in the mail or online.
-Pay any monthly manual bills - These are bills that I don't get a paper statement for but that need to be paid every month. For example, writing a check for our tithe to our church the first week of every month (not technically a bill but it is a set, regular expense that we feel so strongly about that we will ALWAYS pay every month, no matter what our financial situation.)
-Update Mint: categorize expenses & check budget status - By doing this at least weekly (sometimes I do it on Mondays too when I am grocery shopping), it keeps it from piling up. If you don't track it regularly, it's hard to remember what you bought at Target three weeks ago, and therefore it's difficult to categorize the expense. It's much easier to remember when I do it weekly and it holds me accountable on my spending and keeps me from going on splurge streaks.
-Check online bills/automatic withdrawals/monthly payments/automatic deposits - Like I mentioned above - to make sure that companies aren't drafting more than they should from our account.

I think that's about it for the Finance section! Feel free to shoot me any questions you may have. Budgeting and handling money can be stressful and confusing. 

Up next - Home Improvement!


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Have a wonderful day & thanks for stopping by! xoxo
Nicole