It’s no secret that I love talking about money. Most of all, I love talking about how to manage it and how to save it! Today, I figured I would FINALLY share the surprisingly lazy system we use to manage our money. But I must caution you, our system is so easy that you just might end up asking why you haven’t done something similar sooner. Not to worry, it’s never too late to get your financial butt in gear and implement a lazy system for yourself! So without further delay, let’s get into the nitty-gritty details!
A Note On Automated Payments
Before we dive in head first, I need to make a confession. Surprisingly, I am not a fan of automated payments. It’s most likely due to me being a control freak and when things are automated I feel out of control. Go figure.
I also realize this stems from being a single parent with a single income for a few years. Back then, I really needed to account for every single dollar each month. I ran my checking account pretty low most months, so having anything automated could’ve thrown a wrench into the whole works. Because of this, I became accustomed to accounting for every dollar and not letting my dollars go until I absolutely had to.
During that time I also realized something about my personality. I realized that if I had extra money sitting in my checking account it would be frittered away little by little until it was gone. Hence, I only kept enough in my checking account for one month’s worth of expenses at a time. Anything above that was immediately transferred into investments.
And since I’m the CFO of the Mad Money Monster household, I have to account for my personality. Therefore, just like before, I direct every dollar where to go at the beginning of each month and transfer the rest into investments. If not, with my frittering personality, we wouldn’t reach financial independence anytime soon.
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Oh, it’s that time of the month! You know the time I’m talking about. The time you dread so much that you never even thought to devote an additional millisecond to it in order to develop a system. Yep, it’s THAT time of the month. So if you just happen to be someone who doesn’t automate every bill, keep reading.
Just what does our monthly bill payment system look like? Once a month I crack open the computer, sit down in front of my Excel spreadsheet, and get to work.
Gotta Love Excel!
About that spreadsheet… I keep a separate tab for each year and each year has 4 columns per month. This is our actual Excel spreadsheet for this month. At the beginning of this month, I inputted all of our income and all of our expenses. I paid all of the bills in one sitting using our bank’s online bill pay. Yay! Done.
|Internet||xx.xx||x||Check for discount|
|Pet Food||xx.xx||x||Check for store sale|
|Mad Money Cat Chip||xx.xx||x||Chip activation fee|
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Aside from my employer-sponsored retirement accounts, we have all of our investments with a single, low-cost brokerage firm. I can count on one hand how many investments we hold with that firm, too. This falls right in line with keeping things simple, lazy, and almost free!
Tracking Our Net Worth
Without question, the absolute best thing we do for our overall financial health is tracking our net worth using Personal Capital. I must say, if you’re not tracking your net worth, you need to be. It tells you if you’re making progress or digging your debt hole deeper.
Net worth is simply your Assets minus your Liabilities. So even if you feel like you’re not making progress because you don’t have much money to throw at investments every month, as long as you’re paying down debt your net worth is going up! And let me tell you, seeing your net worth go up every month is a big piece of our motivation. In fact, it’s hard for us to NOT check our net worth with the handy-dandy app we have downloaded on our phones.
Personal Capital has a user-friendly website and app, so even the most technologically-impaired person has a real shot at becoming PC-savvy. You can link all of your accounts (including accounts with your employer!) within seconds and everything is secure. The net worth tracking isn’t where their services stop, either.
I do love our spreadsheet, but truth be told, I’m in the process of linking our monthly bills (currently only recorded in our old-fashioned Excel spreadsheet) to have everything in one place. It’ll also help me with reminders so I don’t miss a payment. It doesn’t happen often, but even a control freak can make a mistake.
And just in case you love financial planning and investment analyzing like we do, Personal Capital can do that, too! And all of this is for Free. Don’t get me wrong, I won’t give up our spreadsheet, but I will enjoy having a backup with reminders. If you’re looking for a streamlined financial tool with plenty of options, I suggest giving Personal Capital a try!
Well, there you have it. That’s how we manage our money in a nutshell. Do you have a better system or a helpful tip? We’d love to hear it!