Before we had children, my husband and I were both working as teachers. We made very modest incomes but we both came into the marriage with very little debt. We were terrible with money. Like so many people, we didn't have any idea where our money went. It's not like we bought nice furniture or went on awesome vacations. We just pissed it away. I could just kick myself (and my husband) for how irresponsible we were. We should have saved quite a bit of money. We didn't save a penny. Really, it's embarassing to say that, but it's true.
By the time we had our first child, we had our student loans paid off and had zero credit card debt. The month before she was born we paid off my car, so we had no car payments. We were able to hold there for a few years. We didn't really save, but we didn't go into any more debt either.
Over the last couple years we haven't done as well. For a long time I didn't even really pay much attention to what we spent where. I knew we didn't have much extra money so my plan was to not spend money on anything unnecessary. Somehow, we continued to accumulate debt. A few months ago I actually tracked what we spent where. I was in shock. We had even less money left over after bills than I thought. I thought I had a good idea where our money was going but I was way off.
At that time I set up this binder. It is our money management binder.
(It's not near as cute as my home management binder. This binder is one that I got on clearance at back to school time.)
I have the following sections:
This is a list of what our bills are, in the order they are due. The purpose of this is to make sure every bill is paid each month. There have been a few times a bill has gone unpaid. Not because I chose not to pay it but because I never got the bill.
This is a list of each category where we spend money. There is a column for the amount budgeted and next to it a column for what we actually spent. The plan with this is that I can look at what was budgeted, compare it to what we really spent and make adjustments, if necessary.
bill paying log
I print out a calendar page for the current month. As a bill comes in, I write the name of the company as well as the amount due in the box of the due date. Then, when I pay the bill I write the date paid next to the amount
I print out (another) calendar page for the current month. For ever dollar I spend that is not a bill, I make an entry on the date I spent it. This is really to help me track what I am spending when I leave the house. I am trying to curtail my unnecessary spending and this is a way to look at the amount I am spending each month.
In this section I have a page for every credit card we have a balance on. I was hoping to keep track of how much we paid each month so I could watch the balance go down. It hasn't been that easy. We have some monthly bills that we use a credit card for (like gas) and that amount gets paid each month, in addition to what we are putting toward the balance. If I wrote down the amount I paid on that card it would look like I was paying down the balance by a larger amount. My husband also often has to put something on our credit card for school and then get reimbursed. (I am never happy about this, it really is a mess and we don't always get reimbursed for everything.) The reimbursement is never fast so that is difficult to track.
I love the idea of this challenge and hope this can help me get my act together a little more.
Today's part of the challenge is to create a budget showing where every penny we bring in goes. That's a little different than how I use my budget page. I am happy to try it this way, obviously what I've done hasn't worked.