Monday, October 14, 2013

Day 14: Tweaking a System: Paying Bills and Keeping Track of our Spending

Happy Thanksgiving, fellow Canadians!


Yesterday, I defined a "household system" as being made up of two separate and distinct parts:
  1. everything in the system has a home, there is a storage solution in place, and
  2. there is a procedure, or method of dealing with the items.
A few months ago, I noticed I was having trouble paying my bills on time. My procedure for collecting the bills was to let them pile up on the top shelf of this mess:

This is how my paper system looked in July.  You can see how my bills might have become a little lost.

I was supposed to put my bills in our "budget" file folder. It lived in this:



Worse, the budget file, the place where I kept not only the unpaid bills, but all the papers related to tracking out income and our spending had gotten too big and difficult to handle.



I had too many different kinds of paper to keep track of and the file wasn't letting me sort them effectively. As well, I was afraid of papers spilling out of it every time I took it out to use it.

When I saw Toni Morrison's Budget Binder series, from A Bowl Full of Lemons, I knew that a binder would be perfect for me. So, I took one off my shelf, emptied its contents and set it up anew. I kept the cover insert I created ages ago.


Inside:

This pencil case holds all the tools I need to work:
  • highlighters, pen, pencil, eraser
  • post-it notes
  • rular
  • calculator
  • cheque with my own pre-printed register.



Right away you find a clear page pocket. This is where I keep unpaid bills, now. (I slipped in some class notes in order to preserve some privacy.)

Next, my five tabs:



followed by the monthly tabs:



The five major categories are:
  1. accounts--a most thorough listing of all the financial accounts with which we deal. This was an excellent suggestion from Toni's series.
  2. income--a place to keep track of our income, by month.
  3. due dates--this is a form where I have written out when all of our bills are due. I've divvied it up into two sections: those automatically withdrawn by the bank (about 60%) and those I pay, myself.
  4. credit card--this is not in Toni's series. I like to keep track of our spending by credit card and ideally, pay it off weekly.
  5. budget--this is really just an introduction to the monthly tabs. Behind each one for the month, I keep our monthly cash flow plan along with the pages I print off from our bank account to track our weekly spending.
It couldn't be easier, really.

When a bill comes in the mail, I put it in the pocket. On Thursday, my "desk day", I do all that I need to do to record our spending for that week, pay our bills and then file them in the "bills paid" folder (still in that black mesh thing, above).

This system wasn't working for me for a few reasons, but mostly because that file folder was inadequate for the job. The binder is easy to pull out and use: it's like having my own little budget mini-station.

ETA: You can catch all the posts in the series here.

Linking up to the Organizing Party at Org Junkie:

2 comments :

Anonymous said...

Thanks so much for sharing this. It will be a huge help to me while I set up my own budget file. I'm going to pin it, hope that's ok.

Sandra Simmons said...

Thanks for sharing this! I agree with you. A lot of times, people fail to pay their bills because of their disorganization. That can cost you more because of late fees and other extra payments. Organizing your bills and other things related to money will keep the costs down and will surely help in your budgeting.

Sandra Simmons

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