It took me a lot longer to create a working budget I felt comfortable with than I thought it would. I foolishly underestimated how difficult it would be to switch from never balancing my bank statement to accounting for every penny. But I am proud to unveil my proposed system today, April 1st! No joke. Well, April 3rd because I had problems uploading the pictures.
I haven’t actually started using it, so April will also be my trial and error month; where I can fine tune anything I don’t like or don’t feel works.
One of my biggest issues was battling with my love of gadgets and my need for old school accounting. I downloaded (free) app after (free) app and tested each for a week before abandoning them. Not that there weren’t some really great ones out there, but none of them motivated me to stick with a budget. Which is something that I really needed since it goes against my very nature. I just wished there was something I could do to incorporate both the old and the new systems.
I finally turned to Amazon and began a search for a household finance book. Wow, are there some really elaborate finance books out there! It just seemed wasteful for someone like me to use because only about 12 of the 50 entries applied to my household. I was feeling a little discouraged and came pretty close to tackling creating my own budget book when I saw it …
It looked perfect. Spunky, simple, organized … everything I was looking for! And it was pink.
Check out the Mead Organizher Expense Tracker on Amazon. I was barely able to contain my excitement for the two days it took to receive it. I was not disappointed when it arrived.
It has a thin plastic decorative cover and these unique rubber, seamless rings that allow you to fold the pages behind itself just like a notebook. It comes with a clear plastic sleeve in the front and back to stash important documents. Each month has its own folder with a pocket on either side and a proposed finance tracker/budget list.
Right away, I decided I wanted to create my own finance sheets so I could tailor it to my household’s needs and not just have a generic list that would only partially be utilized. Plus the paper was really thin and that just annoyed me. Once I started this task, it dawned on me that if I didn’t use the calendar printed on the folder pocket … I could re-use this organizer for years to come! Money saver!
My Household Budget: I used the Organizher forms (I just have to take a moment to applaud the cleverness of the marketing on this name … perhaps it is sexist but it sold me!) as a template and created a Household Budget. I made sure to include all the expenses I could think of as well as add additional lines in each section. I created columns for the estimated budget, the actual budget and how much we went over/under budget. The estimated budget for each month will be based on the final column in the previous month. I also made it as cute as possible.
At this point, I discovered a flaw in my system. Since we had gotten the Citibank Double Cash credit card and had begun using that in lieu of our ATM card … I couldn’t also have the Citibank card listed on the budget because whatever was charged on the card would have already been accounted for in another category. Which made me realize I would also need to somehow keep track of what we purchased on the card so we could get an idea of how much we spend in each area. So a second form was created.
Citibank Double Cash Credit Card Sheet: This form would be used to track all the charges on the Citibank card (I feel like I should rename this to something like Money Maker or Cash Card) and which category the expense would be applied to. I also added a column to check off that it had been paid. I liked the idea of this system being so meticulous about receipts because I do a lot of on-line shopping. I never check to see if my card has been compromised or if I was accidentally charged more than once for something. So this actually forces me to pay attention to that!
Monthly Calendar: I have seven bills that are set up for automatic payment through my checking account. Five are insurance related and two are credit cards. I wanted to be sure that I had an idea of how much money I needed to keep in my local bank at each paycheck and how much was available to transfer out. So I used one of the pre-made templates on Microsoft Word to create a portrait calendar. I typed in when each bill was coming out and when our scheduled pay days are. I can always handwrite any notes or unexpected bills as needed.
Ideally, how my system will work is to keep the time I need to put into budgeting at a minimum. My goal is to devote 10 minutes (or hopefully less!) at the end of each day checking balances and reviewing receipts and 30 minutes once a week (Friday) to review and pay the Citibank card as well as transfer funds if needed. This may seem unrealistic and perhaps it is, but if I am tied to a system that takes longer than that, I know I will burn out and give up.
Here is my proposed Household Financial Tracking System (or HFTS – I gotta come up with a clever acronym)
- At the beginning of each month, review the last month for proposed budget on each expense category. Add extra $5 or $10 to bills that have a set amount each month to allow for a little “wiggle room” with expenses. Make sure calendar appropriately reflects when automatic payments will be removed and record any one-time payments.
- All purchases are to be made with the Citibank card when possible. This will maximize the cash back rewards.
- Receipts for all purchases are to be placed in the front envelope of the existing month. These are unprocessed receipts.
- At the end of each day (or several days if no purchases are made), go through each receipt and confirm it was deducted from the appropriate account. Mark it on the Citibank sheet if applicable. Put all processed receipts in the envelope on the back side of the folder.
- Every Friday, check all accounts for accuracy. Pay off the balance on the Citibank card and mark sheet that receipts were paid. Transfer any extra money into appropriate account if applicable.
- At the end of each month, calculate how much was actually spent for each category and what the difference is from the estimated amount. Any additional funds, transfer to appropriate account. Double check all receipts have been accounted for. Staple all receipts for the month together and leave in the folder for each access.
And that’s that! I will do an update after this month to report on how the system worked and what adjustments (if any!!) I had to make. I already have my husband on board (and trained!) to deposit any receipts in the front pouch of the current month. We are hopefully on our way to becoming even more budget conscious and living a simple life!