Organizing Money

Why One-Budget-Fits-All Doesn’t Work – And Why It’s Difficult to Compare Spending Between People and Families

Whenever I leaf through a personal finance “workbook,” I usually wind up getting frustrated. Such workbooks provide “example budgets” and “recommended percentages” that completely miss the boat on the financial realities of most families. Why? Because almost every family has a different allocation of money within their personal budget. Take food, for example. Recently, I …

Wallet Hacking

One of the first major challenges I had to overcome during my financial turnaround was right there in my own back pocket. It was an overstuffed monstrosity, holding several credit cards, a gigantic pile of receipts, and a plethora of other nonsense. When I actually needed something out of it, it was a challenge to …

How Checklists Help Me With My Personal Finance – And How I Trick Myself Into Making Them Work

Regular readers of this website have seen that the idea of lists in various forms comes up over and over again. I make “lists” of the stuff I need to do, lists for the grocery store, lists of home and auto maintenance tasks, and so on. I haven’t even mentioned many of the things that …

A Two Checking Account System: Why It Works For Me

Over the past several months, I’ve started to really bank on a system of two checking accounts for my personal use, a system that has confounded a lot of people in my life. “Isn’t having two checking accounts rather confusing?” I’ve been asked more than once. “What’s the point?” It turns out that there really …

Categories: Organizing Money

The One Hour Project: Go Through Your Important Papers

This post is part of The One Hour Project, in which you can spend just one hour to put your finances in a better place without a big lifestyle change, through frugality or other financial choices. Many people (myself included, until pretty recently) have a box of “important papers” where they toss things that they …

How To Balance Your Checkbook In The Era Of The Debit Card

This weekend, my mother, who is still firmly in the era of the handwritten check, marveled several times at my methods for paying for many things. I showed her how I had online bill payments set up, used my credit card for a number of purchases that she would have used a check for, and …

How Much Cash Is Appropriate To Carry?

Even though I cover almost all of my expenses using plastic, I do tend to keep a small amount of cash in my wallet to cover emergency situations, tips, and such things. This seems to be a regular thing for many people – most people seem to have a bit of cash tucked away for …

My Weekly Bill-Paying Routine (In The Absence Of Paper Checks)

As I’ve briefly mentioned on here before, I’ve almost entirely abandoned paper checks. I keep a checkbook around for the rare situation where one is needed, but I have written exactly seven checks in the last six months and all of those were to local businesses. Over the last two years, as I’ve gotten more …

A Perfect Case For Making Things Automatic

Angela writes in with the following situation: I didn’t see any archives where you unexpectedly come into money. My husband is re-enlisting for a big chunk of change (in the end we will get about 37k after taxes). Here is where we are now: Credit Card 1 – 10k @ 14.25% Credit Card 2 – …

Categories: Organizing Money

How To Set Up Multiple Savings Account Funds Within ING

In the aftermath of yesterday’s discussion about how to manage several funds in one account, several people mentioned actually opening multiple savings accounts at ING Direct under one general account, enabling people to sort their money (I happen to be a big fan of ING Direct, but you may also want to read the note …

Several Funds, One Account: How To Manage Them

Over the past several months, I’ve suggested that people break up their savings into several smaller funds for various purposes: a home maintenance fund, an emergency fund, an automobile fund, and so on. Some readers have asked whether or not I use several accounts to manage this cash – the truth is that I use …

Categories: Organizing Money

Financial Paperwork Bankruptcy: Should It Be Done And If So, How?

An old friend of mine discovered this site and asked to have lunch with me because she had a few questions she wanted to ask me about her financial situation. She was actually in good financial shape, but rather than having any sort of filing system, she would mostly just glance at old statements, toss …

Categories: Organizing Money

Using A Moving Average In Budgeting

My wife and I use a simple mathematical construct called a moving average in order to help us budget and estimate upcoming bills. What’s a moving average? Let’s say our telephone bills over the last twelve months were as follows: May 2006 – $55 June 2006 – $55 July 2006 – $58 August 2006 – …

Categories: Organizing Money

Calculating Net Worth: What Should One Do With Their Primary Residence?

Several readers have asked me how a person’s primary residence should be used when calculating net worth. As we’re on the verge of buying our first home, this becomes a very relevant question to us for the first time, so I spent some time looking at the options: Include the debt, but don’t include the …

Separating The “Wants” From The “Needs”

My wife and I have a monthly financial review meeting where we sit down with all of our bills, credit card statements, and so forth. We go through everything together, item by item, and try to figure out where we can trim our spending. Most of the time, we’re in pretty clear agreement on things, …

How To Start An Electronic Financial Document System

Yesterday, I spent several hours setting up an electronic system to maintain most of my records instead of using a filing cabinet system as I described a while back. What is an electronic financial document system? Basically, it just means that instead of saving paper copies of your financial records, you save them all electronically, …

The Real Reason So Many Personal Finance Gurus Encourage A Written Budget

If you’ve ever read many personal finance advice books, you’ll find that the vast majority of them encourage the reader to make up a formal budget and write it down (in fact, I even wrote a guide along those lines myself). Without a doubt, making up a formal budget is a very good exercise for …

A Fresh Start: How To Organize All Of Your Financial Documents In A Filing Cabinet

In the past, I had a pretty effective system for managing my papers, but now that I’m married, we have a child, we’re about to buy a home, we have a second child on the way, and we’re starting to actually have investments to keep track of, the old binder system simply isn’t cutting the …

Categories: Organizing Money

Do A Financial Spring Cleaning

Today is a lazy Sunday in the early spring, the first authentic lazy Sunday I’ve had in a long while. The taxes are done and now it’s time for a financial spring cleaning. What’s a financial spring cleaning, you ask? For me, it’s a post tax filing tradition in which I go through all of …