Thursday, January 22, 2009

Simple Low Stress Finances

A few months ago I decided that I needed a change in the way I deal with my finances each month. It seemed like would spend hours and hours and multiple nights a week every week of the month paying our bills, balancing our checkbooks and allocating money to savings and investment accounts. When I was not looking over our finances I would be stressing about them. Did I get all the bills paid? Should I have paid more towards this debt or put more in the emergency savings account? It was stressful and time consuming.

Well a few months ago I decided I needed to come up with a better way of dealing with our finances. I made an excel spreadsheet listing all the bills, debts and savings goals we have each month. I split up the bills and debts into two groups based on due dates. If a bill was due in the first 15 days of the month it went in one group and in the last 15 days of the month was in the second group. At the end was our different savings goals such as emergency fund, investment account, gift fund and vacation fund.

Now I only look at our finances twice a month. At the beginning of the month I take care of paying all the bills due those first 15 days. Then around the 15th of the month I take care of all the bills due the second half. After all the bills have been taken care of I allocate any leftover cash to our savings goals. For these savings goals we already have set amounts we want to try to save each month so I don't have to think how much to put towards each goal. Thus I only deal with my finances twice a month and don't have to worry about whether the bills have been paid or our savings goals have been met. It's my simple low stress low worry way to deal with our finances.

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