Let’s be honest, we all lead busy lives, and we are all going through different life stages.
We have so much to keep track of, our social calendar, our children’s schedule, birthdays, friends and family, the list is endless. It can feel like you’re running an empire, and most important of course is our finances, but it always seems to be that one chore that is left to last.
It can seem boring, or overwhelming, whatever the reason we have put together a list of how to organize your finances in 5 easy steps.
It is recommended to have a minimum of two to three bank accounts; this can increase depending on your life stage.
Account number one should be used to have your wages/salary paid by direct deposit into your account. When all your bills are paid, and savings have been transferred, I would use this account for everyday spending. In doing so, it gives you the opportunity to track your spending habits; this is helpful when your spending doesn’t match your budget.
Account number two is for all overheads and bills including mortgage/rent, utilities, insurance, etc.
The third account should you chose this option should is for savings; it is advisable to transfer a set amount per week or month depending the frequency your salary is paid into this account.
Banking has never been easier with online banking; it gives us the opportunity to have better control of our finances.
It makes a big difference to have your wages/salary paid by direct deposit.
Payment is received into your account on the morning you are due to get paid. There isn’t a need to make unnecessary trips to the bank or atm to make a deposit. It gives you the opportunity to allocate the money to various accounts and bills as soon as it is received.
Many employers offer to split your wages to different accounts; this encourages a better system for savings. This method is by far the most secure, we all had that time when we received our wages and mislaid them on the way to make a deposit.
The most efficient way to receive your bills is via e-billing or paperless billing.
This process works on the basis that the service provider will notify you via email or text once your bill is available for viewing. There are still plenty of us that prefer to receive bills in paper format in the mail.
There is an assortment of ways available to pay bills; it’s just about finding what best suits you and your system. Online banking, check payments, AutoPay, credit card, etc.
There are many gas/electricity suppliers providing level pay, simply explained an estimate of your yearly usage is taken and broken down over twelve months, thereby giving you a set amount per month. The account is reviewed every quarter; the company will notify you if there is an increase or decrease in the monthly payment.
This option might suit some people that don’t want any surprises when it comes to their bills.
We speak from experience in our early twenties we weren’t very organized with our finances.
The first time we saw the system of listing all our bills on a monthly bills calendar, it was like a light bulb moment. It was so simple, but that’s the point it is about keeping things simple.
There are many sites available online to download budget calendars, or it can simply be done with a pen and paper. We use Wunderlist to manage our families bills. We all spend so much time with our phones in our hands now so why not make use of this facility. We list the company, due date, and amount, and then the option is available to set it to repeat weekly, monthly, etc.
We are planning a post on Wunderlist at a later stage and the many uses it has.
In all the previous points we have covered bank accounts, wages, bills and monthly calendar, now if we have gotten this far, we are doing great.
Its, not the time to stop, all that organizing for nothing, not on my watch. The next step is to decide whether to use paper or electronic filing; again this comes down to a personal choice and the tools available to you. We use both paper and electronic for now, I currently have a folder for all our finances, and a divider separates each section.
I do think for us it is time to go paperless, and perhaps in a future post, I will document our process as we move into the digital age.
There are advantages and disadvantages to all of the above. Ultimately it comes down to trial and error, most importantly it is about finding a combination or system that works best for you and your circumstances. We want to be able to manage our finances, and not have our finances managing us.
There are those among us that are great at technology and all the new options available to us. However, not everyone has that particular skill set.
We are happy to answer any questions you might have, but we would also love to know how you currently manage your finances?
Related Content: 8 Reasons You Are Still In Debt