How to Adult: Tracking Budgets and Bills
Third in my series of How to Adult is my last tip on managing money like a grown up, and the interesting trick that somehow changed my way of keeping track of bills.
For two years now I have been using an Erin Condren Deluxe Monthly planner to organize anything budget related: our monthly bill payment, vacation planning notes and information, notes for big purchases, our income, charitable giving, managing debt... you get the picture. It has a monthly spread for each month, and a few pages after each spread to use however your brain works best. Past the monthly spreads are lined notes pages, with plenty of space for whatever you might need to write down. The covers are super pretty and customizable. Here's the front of mine this year:
I use the monthly spread to fill out when we get paid and when bills are due. It gives me a great overview of the month and the flow of our money. Dan gets paid every two weeks and my income is variable from my business. I try to utilize the Profit First System of paying myself twice per month on the 10th and 25th (if those dates fall on a weekend, I just tweak it a bit to be during the week-I rarely do this on a weekend).
Here is a picture of my monthly spread with the pretty stickers (from Amazon) noting pay days (darker purple) and bills due (lighter purple).
My favorite page is the one below: a list of all the recurring bills due each month, with the date, name of the bill, amount, and a place to check off when its paid. (SO SATISFYING!) I also place an "A" with a circle around it if the bill is paid automatically. The bills with dates are paid every month; the ones without are generally paid quarterly. This little list made a huge difference in knowing when bills were due, paying them on time and managing our money.
I kept some info private and didn't include the actual amounts- I'll fill them in later. The column on the right gives me a little space to note bigger one-time expenses that impacted our budget that month (registering for a sport, birthday gifts, medical expenses above a typical co-pay, special Girl Scout events, etc).
Another helpful page after the monthly spread (on the left side of the Bill List) is the page with rectangular boxes. I like to fill these in to keep track of debts, specific items we are paying down (we still have a bit left of our big Disney trip from February to pay off), Pretty Neat Income and Sinking Funds, and our Charitable Giving and Donations to keep track of at tax time. When I am paying bills, I fill in these sections with the date, amount and payee. It's a good way to see progress from month to month (or see areas to improve).
You of course can track any kind of thing that's important to you and specific to your situation: tracking savings for a big purchase or vacation, tracking variable incomes, bonuses or commissions, retirement accounts, college savings... anything financial that you want to keep a specific eye on.
The last page in the monthly section I use is a new one: Monthly Sinking Funds. Sinking Funds are a great way to set some money aside each month for specific categories- things you are either saving up for or have a wildly varying expenses that come up unexpectedly. This, to me, is the hardest part of budgeting regularly: the unexpected items for the kids that pop up, and I'm going to try to use Sinking Funds to cover some of those.
So you can see on my list I'm putting a little aside each month for home repairs, car repairs and maintenance, saving for Christmas, clothing, and medical co-pays. Some months I won't have any expenses in these categories, so the money just rolls over to the next month. If I have an expense in one of these categories, I can use this cash set aside to cover or at least help cover the expense.
Here's a perfect example: Michaela came home yesterday with a field trip permission slip. Her AP Spanish class is going to NYC and taking a walking tour and visiting the Met. The cost of the trip is $89.00 and she asked if I could write her a check right away as the trip is first come, first served with a limited amount of spots. I can take that $89 from my Sinking Fund account and transfer it into my regular checking account, covering the cost of the trip. I will note this transfer on this list in the KIDS category. It will wipe out my savings from this category, but I can put aside some more next month.
I'm also trying to set a small amount of money aside each month to go towards two big parties we'll be hosting next year- a confirmation party for Jenna and a high school graduation party for Michaela. This savings won't cover the whole cost but will give us a start!
For a great, in-depth description of Sinking Funds and how to use them, check out Jen DuFore's YouTube videos, found here on her channel JenPlans. She also has some great videos about budgeting using the Dave Ramsey method. She is the go-to gal who I and many, many others look to for information about how to best set up a household budget.
Hopefully this series has given you some food for thought about how to set up a system in your own home for managing incoming bills, bill payment, and setting up long-term paper storage systems. Always know you can email me with any questions you might have. Of course if this all sounds great but terribly overwhelming and you don't know where to start, I'm here to help! I have assisted many clients with these exact same tasks and systems. They work really well for clients and for my own house as well.
So... go forth and adult!!! You can do it!!