Monday, January 9, 2012

The System

When I was setting up our household notebook, of course, I needed a  "FINANCIAL" section. I have strayed from Quicken or MS Money for the simple reason that I was always crashing my computer and losing data. Which, basically made all those entries an exercise in futility. Going back to the pen, paper and simple math has been very easy. Although there aren't any pie charts at the click of a mouse, I do have a clear picture of what is going on with our funds!

There are eight basic categories needed to sustain life as we know it. Food, car, clothing, entertainment, gifts, household, personal, and yearly. (mundane recurring expenses like utilities and taxes were accounted for before I budgeted amounts for these more interesting categories) Since life happens, I can rob Peter to pay Paul, but so far, there has been enough in each category to meet our needs. Easy peasy, since it is only the ninth day of the month! LOL We have recently changed banks, so it was getting a bit confusing as to where the funds for each category would come from. Well, that little problem was solved when I realized it doesn't matter! What is important, is how much I spent! If we keep on track with the budget, everything will work out just fine.

Basically, the system is this. Under each category tab I placed a three column ledger sheet. (I bought a tearaway analysis pad at Staples that is perfect. I can easily print the headings on the computer, too, which tickles that "perfection" gene)  I start the month by entering the budgeted amount for each category.  When I purchase something in that category, I simply deduct the amount  to keep a running total.  That tells me exactly what I can spend on that particular category at any given time, or if I have to wait awhile to purchase something. Since there is a reasonable amount placed in the category every month, the "leftovers" will add up over time to purchase the more expensive items.

The 'yearly' category covers insurances and our vacation fund.  On the first of every month, I will simply transfer those amounts over to a separate checking account, to keep it out of  harm's way!  Then, when the funds are needed I will write a cheque from that account.  I am very pleased with how my household notebook has turned out, and especially with how simple this system will be to keep up. As with all plans, the proof is in the pudding. I will let you know at the beginning of next year how it all worked out!

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