One of the top three reasons for marital strife is money. Not having enough is one thing, but not having enough cuz a person doesn't know how to manage it is a whole other kind of beast.
For the first 7 1/2 years of our marriage, Dan took care of things on the financial scene. Strange, considering he had trouble counting how many shoelaces were on one shoe. I loved math, numbers, details, etc. I counted for a living (how many boxes of paperclips arrived today?). But we didn't really communicate about money in the early years of our wedded bliss. For who-knows-what-reason, he was in charge.
When we came to McBride ten years ago, he simply asked me if I could manage the finances, seeing as he worked full-time and I was a homemaker. No kids then, so yeah, I did have some time to spare :)
I was excited. And as I looked things over, I found a way to keep track of our pennies, so that in over ten years, we've never bounced a check or missed any other payment. Not bragging, just excited to have a fantastic tool! Now being that I just finished a superb book about a guy who took a challenge not to lie for a year, I better elaborate. There was a period when our internet stick provider was updating their system, and I paid our bill as per the agreement, only to find out that we had over usage charges for three months. They never let us know until three months later (we never got a bill), but it stands out on our credit score like a rotting, slimy, scabby sore. And they even admitted it was their fault. But my credit rating still suffers (reminder, to do: must look into having that reversed!).
But I digress. So, wanna know our secret? No secret at all. I'd LOVE to share it with you. It means peace of mind every single month. Not that I can always make ends meet. But if I can't, it's usually cuz I've overspent on flexible stuff (food, clothing, entertainment, etc). Our fixed expenses (tithe, insurance, rent, phone bill, etc) are always covered. So here's our monthly financial tool. I can have our whole month's finances done easily within an hour. Feel free to use it! And please note, I do not take responsibility for what does or doesn't happen to you if you use this. Maybe this won't work for you...I'm not to blame if you bounce something while using this tool. I'm just trying to show what works for us, and others who've tried it.
* You'll need a piece of paper, a pencil and pen, a calendar and a check book register. Many businesses hand out calendars for free, and registers are free at your local bank. It helps to start just before a new month begins, or just before your next pay check comes in.
PRELIMINARY STUFF:
* Write down all your fixed expenses for a MONTH on a piece of paper and the date they're due, in order of the date they're due.
* HINT: look at your utility bills, or other monthly bills that tend to fluctuate (hydro, propane heat, phone), and pick an amount higher than the highest bill. For example, our phone bill is usually $80ish. So every month I set our automatic payment at $100. It covers our bill, and always keeps a little credit on the account. That allows for a freak month that is over $80 to be covered with the excess, and occasionally we have a "free" month where our whole phone bill amounts to $0. Handy when Christmas is coming!
Also helps relieve the pain of huge bills, like propane, cuz if you pay ahead $120/month, when the $600 bill comes 4 months later, it's already mostly covered! ***But don't forget to always look at your invoice, when it comes in. I've saved lots by double-checking our phone bills for over-charging, and occasionally there's more owing than I thought, so I have to add another payment of a few bucks to cover it.
* Write down all sources/amounts of guaranteed monthly income. It's easier to do when you're bringing in a salary, but otherwise take the lowest income you get, and work with that. Include Child Care Tax Benefits, Family Allowance, etc.
*Set a certain date for a bill to be paid, a few days before it's due. Our phone, for example, is due on the 27th or 28th of each month. We've set up automatic payment through our bank for the 22nd. That gives a few days for the payment to reach the company. It'll never be late!
NOW GIVE IT A PRACTICE TRY:
* Use a practice sheet in the check book register. Write down how much you have in the bank. Always use exact amounts. Never round up/down.
* On the next line write the first bill due. Write how it's paid (AP--automatic payment like car insurance the company takes out, PP--pre-authorized payment like hydro that I have set up to be paid out, Cheque #, DC--debit card, D--deposit, DD--direct deposit...whatever symbols work for you). Write the date it'll be paid, Company, and amount. Subtract that amount from the balance of what's actually in the bank. Do this with all the fixed expenses. Remember, you're not paying them right now, you're just writing it down.
* Write down the income in there too, again, in order of the dates.
* Later, you can go in and set up automatic bill payments for those dates. Or if it's a cheque, you'll know the money is "subtracted" from what's actually in the bank, and it won't matter when the cheque is cashed...the money will be there. If you pay online, write the confirmation number on the register line.
* Once a week or so, I go in and double-check my balances. I put a check mark in the little space on the line, when the item has cleared/been actually paid, through the bank. To make sure things jive, take the last amount in the register, add the uncleared items, and the total should be the actual bank balance at that moment.
I'll try to make up a fake register here, to show you. Excuse the wobbly columns...hard to do on a post.
Chq No./Code Date Description of Transaction Payment Clrd Deposit Balance
July 1 Beginning Balance 1000.00
PP July 2 AIM tithe 40.00 960.00
#101 July 2 Storage Rent Chq 2 of 5 150.00 810.00
DD July 5 Child Tax Benefit 200.00 1010.00
PP July 7 Hydro 75.00 935.00
AP July 7 Mortgage 350.00 585.00
AP July 10 Van Insurance 93.25 491.75
AP July 12 Bank Fees 15.95 475.80
D July 15 Paycheck 1500.00 1975.80
PP July 16 Medical Services Plan 110.00 1865.80
PP July 20 Telephone 100.00 1765.80
#102 July 25 MEFC tithe 200.00 1565.80
PP July 28 Propane 250.00 1315.80
AP July 28 Life Insurance 100.00 1215.80
AP July 28 Student Loan repayment 400.00 815.80
AP July 29 Mortgage 350.70 465.10
DC July 1 Cash for July Flexible 450.00 15.10
OB(online banking) July29 Transfer to savings H949373847 10.00 5.10
D July 30 Paycheck 1400.00 1405.10
So this is all written in the check register at the end of June. I know that after the coming bills are paid for the month, there is $465.10 at the end of the month. That's what's available for flexible expenses (food, gas, vacation, etc). If I take about $450.00 out at the beginning of the month in cash, then I won't go overdraft all month, and I won't bounce any payments. I write that down after the July 29 entry (with a check mark to show it's come out--I can't figure that out on this computer...) Throughout the month I put a check mark beside the amount (under Cleared/Clrd) when it does indeed come out of the bank. So my bank balance today (July 1) says $1000 but I know that TRULY, I only have $5.10! All the fixed expenses are paid and I don't have to worry about them all month! ***NOTE: This is where you can get into trouble if you use debit card. Debit transactions MUST be written down in the register. And open communication between spouses is key! Working with cash is safer!
*Transfer those fixed expenses to the paid dates on the calendar for July, and also for subsequent months. Reminder that MSP, telephone, propane are all paid a few days before their actual due dates. When it's all written down, I can set up the bank account to make automatic payments.
I'm more than willing to help with any questions you have. This has made our lives so much simpler. But again, it's only one tool. The important thing is that you find something that works for you. No more overdraft charges and bounced checks! Yippee :)
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