Thursday, January 8, 2015

One Handed Finance System

In March of last year I wrote a post about how I was organizing my finances- the finance binder. It worked well for a while but I found it was kind of awkward to take with my anywhere. There are some weeks that I just am busier than others so I needed something I could take with me. There is nothing wrong with the finance binder if you leave all of your stuff at home but my new one handed finance system works better for those on the go! Ready to see it? It is so easy, you are gonna love it!
The supplies you need for this system are:
  • 8 1/2 by 11 accordion folder (preferably one that securely closes since this will be mobile)
  • business letter size accordion folder
  • small spiral bound notebook
  • business size envelopes
  • bank bag
  • optional: label maker
To start with, open your spiral bound notebook and list every bill you can think of that you need to pay within the month. Then beside that list the payment amount. Then divide the payment amount by the total number of paychecks you have within the month. This will tell you how much you need to set aside for that bill every time you get paid.
For example, if you get paid once a month you divide the monthly payment by one (sorry that one is obvious :) ) if you get paid bi-weekly, divide the payment up by two. (I know there are two or three months where you have more than two paychecks for a bi-weekly pay range but my husband and I always leave it at two and then when we have those extra checks we either save them or blow them. :) It is our way of reward ourselves.) If you get paid weekly, divide the payment by four. Got it? Now if you have a bill that you pay every six months or once a year. List those as well. Then divide that payment into the appropriate months. So for a bill you pay every six months, divide the payment appropriately. So if you get paid every week, divide that payment by 24. If you get paid bi weekly, divide it by 12. If you get paid monthly, divide it by 6. Do that for every bill you have.
You will also use this notebook to record payment amounts for the month. This way you have a record to look back on if you need to remember how much you paid on something.

Now for the business letter size accordion folder. In this I have tabs labeled, "To Pay", "To File", "To Keep", & "To Mail". I also have a blank space to keep my checkbook, blank envelopes and stamps. Now for the part that makes it so easy.

When I get a bill in the mail, I open it. I look for the due date and the payment amount. I put everything back in the envelope that it came it and on the front of that envelope I write those two things: the due date and the payment amount. I put that whole envelope in the "To Pay" section. I put the envelopes in order by their due date, first to last. Then when it comes time to pay that bill, I have envelopes, stamps and my checkbook all right there together to pay that bill. If I write the check and get it ready to mail while I am at home, I put it in the "To Mail" section of the organizer so I do not forget to mail it.
Once a bill is paid, I write the date I paid it, the confirmation or check number and the amount I paid on the front of that same envelope where I had wrote the due date and payment amount. I then highlight the paid date so I can tell at a glance that I have indeed paid that bill. Then I move the envelope to the "To File" section. The "To Keep" section is for important receipts or other things I may need to keep while I am out and about.

An envelope is created for each bill I have listed in my notebook along with food, savings, gas, Christmas, anything that I need to save or have money for. Those envelopes are put inside the bank bag.

When I go withdrawal my check or cash my check, I divide the check out into the appropriate envelopes immediately. That way in my head, that money is gone and those bills are paid. Now when it comes time to write the check or go pay the bill, the money is there in that envelope. If I write a check, I deposit the money. This way keeps me from spending money that belongs to my bills. Don't you hate when it comes time to pay the bills and you think, oppsss, I spent that already? NOT a good feeling! This keeps that from happening. Eventually the envelopes do wear out and I have to replace them but hey, I got the box at the dollar store for one dollar so I am not going to go broke just because I have to replace an envelope every once in a while. Now when I go to town to pay bills, everything I need fits in one hand! Yayy!

Now for the 8 1/2 by 11 folder. On Sundays I sit down and take all those paid bills out of the "To File" section of my smaller folder and I put the contents into this file folder. I take everything out of the envelope, write the paid information on the bill and file it under it's correct tab. Every bill has it's own labeled tab where it belongs. Usually this folder stays home unless I think I may need my bill stubs for some reason to business somewhere. Now at the end of the year or preparing for tax time, it is all together.

Even with the 8 1/2 by 11 folder, it all fits in one hand! No messing with hole punches, file folders, filing cabinets or the like. It is SIMPLE! It is working great for me.

So how about you? Do you need to reevaluate how you pay your bills? Give this system a try! One handed is nice! ;)

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