Get Organized
Posted by Gail | Filed under Money Management
I’m always amazed at how disorganized people are with their money: Accounts all over the place; bills everywhere; no system anywhere in sight. If you want to save some money and loads of time, spend a little of each to get organized.
First, cull your accounts. Have you opened up chequing accounts hither and yon? Still using them all? If not, time to trim back to just one to simplify your paperwork and keep better track of your money. This is particularly true for couples that have brought several accounts into a relationship. Figure out which accounts are working best for you and dump the rest.
Consider combining accounts at a single institution so you can throw your weight around. You can save money on monthly fees by keeping a minimum monthly balance. Or you can demand higher levels of service and fee rebates by offering to consolidate everything except your credit cards at one institution.
Next, set up a financial tracking system. Whether you create your own spreadsheet, use an off-the-shelf software program, or go with an on-line system, you need to have a process in place for keeping track of your money. It’ll take a little time to get it all set up, but you won’t believe how in-control you feel once you’ve laid the groundwork.
If you’re an expert at excel, create a system for yourself. You don’t need to buy a package. If you’ve got a system that works, please save yourself some money by sticking with what you’ve got. Just USE IT! For those who don’t have a clue where to start, I’ve created a package that you can download from my site called The Gail Way.
The Gail Way includes a:
- Spending Analysis worksheet and instructions
- Spending Journal worksheet with examples
- Budget worksheet, which includes the Life Pie and The Jars.
I created this package in response to all the people who keep writing to me to ask for budgets, spending analysis worksheets and budget binder pages. This is reflective of the system I use. And no, I have no intention of creating an app since that’s code for “easy” and “let’s not think about it too much.” I want you to focus on your money and make every decision consciously.
Finally, make a regular date to pay your bills and do your filing. Regardless of what system you use, if you let yourself get too far behind, your system will go out the window because it’s just too much work to catch up. Instead, do a little every couple of days to keep on top of the bills, the payments, the balancing and the expense tracking.
March 11, 2013 at 7:23 am
I created an excel worksheet a few years ago and do a networth update once a month. It’s great because I can see how well our investments are doing over time, which makes it easier to determine which investments need to be adjusted.
Then, every two weeks we do our budget for our day to day things.
March 11, 2013 at 7:42 am
I have to admit that I have never tracked my spending or kept a budget of any kind but I don’t consider myself disorganized. I pay my bills the day they arrive in the mail or an email tells me my e-bill is ready. Some bills are on automatic payments. I know what’s in my accounts because they are all at the same bank and show up when I log on to TD Easyweb. I have never had more than one checking account but have several savings accounts for different purposes. If I use a credit card for some reason I pay online as soon as I get home rather than wait for the bill to arrive.
March 11, 2013 at 8:20 am
I much prefer to customize my own excel spread sheet, I can never stop thinking of how the pre made packages could be just a little bit better.
March 11, 2013 at 8:44 am
We have a joint chequing account that charges a monthly fee as well as a per transaction fee once the 50 limit has been reached. They do not have a minimum balance system in place to help us avoid any of those service charges. Because my husband has, what he feels, multiple payments coming out of that account, he feels that changing it would be a bother. They will not allow us to keep the same account number if we switch accounts. I hate paying that $15+/month fee. He (we) also keeps a savings account at the same institution that pays pennies in interest; he won’t change it either. (I am trying to convince him to open an ING high interest account instead.) We (I) also have a joint account at a credit union, which is great for direct deposits and automatic payments, but as the closest institution is over 50km away, it’s not convenient for much else. “Excess” money gets transferred into ING high interest accounts; there if we need it, earning some money, but not easily accessible. I am hoping that we organize our finances a little better come the end of summer. If we start paying our insurance premiums in one lump sum, that will help too.
March 11, 2013 at 8:47 am
I think this is one of the most important things – simplification and organization. It makes everything more managable to address and complete.
I use to get comments at work – “you are so organized, I’m so busy, I don’t have the time to spend on keeping organized”. I would say “upfront time allows you to do your work more efficiently and probably more productively”. I believe you either get it or you don’t.
I recently started an intensive study course while working full-time. What did I spend the first few hours doing – getting organized. It really helps and keeps you motivated on anything you’re doing as you feel in control and that it is accomplishable.
Oh – for those who aren’t as tech savy with excel, etc, remember there are a few Gail articles on this site addressing the paper/filing ways to get financially organized.
Happy organizations!
March 11, 2013 at 9:43 am
Thank you for this post Gail. I completely agree with you about the approach to getting finances organized and sticking to a strategy. Especially because it is so easy to fall behind and the mess created is not so easy to sort. As a professional organizer this is exactly the level of organizing I wish for all (including myself to achieve and maintain). Sustainability of such a plan definitely rests with finding an organizing strategy that fits us individually.
March 11, 2013 at 11:13 am
I have two checking accounts one for ‘life’ and one for bills. Once a month I put money in the bill account pay the one bill that isn’t automatic and then let the auto payment do the rest. I use the other account for everything else so I don’t think I’m ‘rich’ when I see all the money that is due elsewhere.
March 11, 2013 at 12:55 pm
I don’t use a spread sheet but do track my money spent in a spiral binder. My auto-payment bills are listed in the front so I know what else is going out of my account. Every expenditure is entered as soon as I come home, and is totalled under different categories each month – house, health, dog, transpaortation, enteretainment, groceries, clothing, gifts and donations. At the end of each year I add each category up and average it out. The monthly and yearly calculations help me see if I’m overspending in that time period and I adjust the next month or year. All incoming bills are kept together in an old toast rack in plain view. All my paid bills are filed in my desk. Its not very Gail-like but it works for me.
March 11, 2013 at 3:43 pm
And on a slightly different level of organization, I’m always amazed with people with 12 different mutual fund accounts, but all 12 invest in very similar things so it’s not like they’re gaining any benefit. Far better to have 4 simple funds – bonds, us equities, cdn equities, and international equities than 12 funds which invest in equal bits of all four.
March 11, 2013 at 4:51 pm
The hubbie is the excel wizard, so he made us an amazing spreadsheet. We worked on the actual budget together, but I am the one that goes back and fills out what we actually spent. He’s always asking how the spreadsheet is working and if there is any new sections, or tweeking it needs. Now that all the numbers are there…he is way more interested and conscious of what it exactly costs to run this household. In our mind looking and analyzing our budget is very similar to analyzing a business profit and loss statement.
March 11, 2013 at 9:15 pm
I use an old paper ledger pad for my budget, write the receipts on it, checkmark the receipt and put it in a drawer to wait for the credit statement to check with it. All real paper, because then it’s always handy, no excuses from me allowed. The monthly budgets are in two pockets of this pocket folder thing, then other things like yearly budget, tax info, etc. in the other pockets. That said, paying the bills automatically from the checking account keeps that so easy, I don’t even think about it. Just check the bank statement carefully every month. It seems a large chore to write the one or two checks a month like to the lawn cutters, so spoiled!
March 11, 2013 at 9:34 pm
Since I used to own a restaurant and did all the books I’m used to Quickbooks so for personal use I use Quicken (essentials for Mac).
I spent a little time upfront entering the budget, making categories that work for us, and recording the monthly auto-pay bills which then allows me to see cash flow for up to 3 months just by toggling the amounts of costs like groceries, garden, gas, etc. I’m never surprised and it being too late to do anything about it!
Every week I download the file from my bank’s online site (30 seconds), drop it onto the Quicken icon and it does the rest, even categorizing based on my previous categories, which is very helpful. You can always override that and make the category something different.
I print a monthly report, highlight where we may have overspent, large one-time charges like property insurance etc. I keep a binder with the monthly and yearly reports to track our progress. Takes a few minutes per week and keeps me on top of any “leaks”, so I could correct the next month.
I do all of the finances so I’ve just put together an “In Case of Emergency” binder for my husband and all the details of all our accounts, life insurance policies, retirement accounts, birth/marriage certificates, everything, is in this binder. (I keep a copy online too)
A friend of ours just had a freak accident and in a coma and I could just imagine my husband groping around to piece together our affairs on my computer, what a horrible situation.
When my dad died at a young age I had to put together my parents info while we were all grieving, it was very sad and stressful.
March 11, 2013 at 10:47 pm
I’m really a pencil & paper girl. I write everything down, every day, and I keep my paper receipts too!
I have gotten to the point where my bills are either auto pay, or the ccs are set up for me to pay them each month. I don’t mind that at all; I like to see the balances drop and give myself a little round of applause when I hit zero on anything.
I’m not quite ready to go totally auto-pay and on-line savings. But I’m working towards a mix of on-line savings, and my bricks-and-mortar savings & checking. I still use one of Gail’s budget resources, and I don’t think I’ll ever be giving that up. There is no way I’ll ever learn Quicken, or dominate the Excel spreadsheet.
That’s what’s I find incredible on this blog; Gail has great ideas and leads me to put them into practice. Maybe the on-line savings doesn’t quite work for me yet, but Gail makes it clear that I need to have something in place of that. I like Gail helping me stay organized.
March 11, 2013 at 10:53 pm
I use Gail’s spreadsheet for budgeting, with a little customisation. It got me out of debt and now keeps my money in line.
For bills (e-bills), they are kept in my Inbox, marked as Unread till I pay them. Seeing them in BOLD annoys me so when I have a chance to get online to pay them I do it quickly. Once paid, the e-bills are moved to a separate Bills Folder, that way I can see immediately what hasn’t been paid.
March 12, 2013 at 1:12 am
@cathleen
Hmm, I should probably keep a printout of the location of all my money for my parents, just in case. Thanks for mentioning it.
March 12, 2013 at 12:00 pm
I’ve always hated the idea of giving companies access to take money out of my accounts. Years of struggling with paying bills on time, and forgetting to move money into the right account and having companies take NSF fees out of my account without my permission and without recourse have completely soured me on it.
I can now afford all my bills, but remembering to move the money from one account to another at the right time is still a struggle. Fortunately, I’ve discovered that my online banking can set everything up for me. Every payday, I have it set up to automatically move a fixed amount of money from my “Pay and Life” account into my “bills only” account.
Further, in the last year I discovered that I can set up regular bill payments. This is me automatically paying a bill rather than someone else automatically reaching into my account to take my money. Now I have things set up so my utilities are paid on the 25th and rent and loans are paid on the 1st without me having to do anything but check once a month to make certain everything’s moving smoothly. Go PCFinancial for setting up this reoccuring bill payment option. It’s a fantastic option, and I hope other banks have it too.
March 14, 2013 at 1:47 am
I guess I am a bit old-school. I started using index cards for each biller I have years ago. We have been in our current house for 18 years and I have all the index cards to that time. It is interesting to see how much things like hydro etc have gone up. I only keep paper bills for 7 years but these cards give me a snapshot to our expenses no matter what time frame I am looking at. I have also started using excel sheets for our daily/monthly expenses so I can track budget amounts and other totals at a glance from any system in the house. This allows my family to see how we are doing and judge whether they should be asking for that new laptop etc. It is one way I can keep everyone realistic in their wants including me. I still like my cards though and will likely keep on using both systems.
March 16, 2013 at 11:08 am
I use google docs (or drive I guess now) for my budget spreadsheet. This way I can access it from home or work or away to keep track of what’s due and what I’ve got left in each category!
May 20, 2013 at 12:06 am
For the tech savvy, I’m using (and loving) mint.com. It took a little time at the beginning to enter our accounts but all transactions are downloaded automatically from our accounts. I have the app on my phone so I can enter cash purchases and look at how we’re doing with the monthly budget as I to through my day. Every few months I log in to make sure that our budgets are in line with what we’re actually spending and to trend our expenditures.