Ok, I should really have titled this ‘how to organise your finances enough‘, or ‘how to organise your finances for the unorganised’, since we’re not using fancy pants spreadsheets or anything, but we don’t need ’em. Pen and paper budgets are FINE. Now, I’m not a natural organiser, but I think that helps if you’re an unorganised person that wants to learn how to organise your finances. You know those people that subconsciously straighten books and wipe round without thinking? Yep, not me. Unfortunately, I’ve had to learn to implement systems that keep me organised without having to spend much time on it.
Here’s the thing: I don’t have a tonne of spare time. Ok, that’s not really true, but I don’t want to spend a lot of time on sorting out my money. I like to spend my Sundays walking dogs, eating and napping, and I work Tuesday-Saturday, which leaves me Monday for cleaning and blogging. I don’t want to spend ages going through bank statements and the like.
A lot of people like Dave Ramsey’s envelope system because it’s so simple – once your cash has gone, it’s gone. I personally don’t particularly like carrying much cash, plus I live in a small town with only one ATM, so it’s not very convenient.
My system of organising my finances is very simple, but it works for me. Provided I don’t overspend, it works very well. Simple is the key here anyway. You’ll want to know what money you have available, and what you mustn’t touch (hence why mine goes straight into the joint account).
What you’ll need
- Your budget – in a nutshell, what’s coming in and going out: wages vs. rent/mortgage, utilities (gas, electricity and water), internet, mobile phone, food, anything pertaining to transport (petrol, bus pass), entertainment such as Cinema or gym passes.
- Three bank accounts – current, savings and joint/housekeeping
- Piggy Bank/money tin/container
Every week (I get paid weekly in cash) I put my wages into my current account. Every Friday, I transfer some of it (usually £150) into the joint account and the rest goes into my savings.
By leaving my current account virtually empty, it really makes me think hard about every little purchase., because it would involve me having to transfer the money over – normally whatever new thing I fancied isn’t worth the hassle.
If you need regular-ish access to the money (i.e. if literally all your money’s in there and you need a new coat) you have two options:
- A savings account such as an ISA. I use this because I’m pretty good at leaving my money where it is until I genuinely need it. If you’re a spendy spenderson though we have option
- A human. I would use my mum, but anyone that you trust. Give them your cash and tell them to only let them have it for [insert variety of reasons here]
I have a terrible fear of checking my balance at the cash point, a hangup I developed at university (caused by me having no money whatsoever). It’s just so…public. Everyone can see you staring at the screen, a look of abject horror on your face as you gaze at your own self-inflicted pittance and commit to your imminent poverty vow.
Online banking means you can have a little cry and then transfer a bit of money over from your savings. It also lets you open new savings accounts and set up direct debits, all without having to speak to a soul. The introvert within me loves this.
It also lets you track your historical transactions, so you don’t spend all day driving yourself barmy about that missing £30 that should be there, only to remember a fortnight later that you needed a new pair of shoes. And some shower gel. And a Dominoes.
Why does having organised finances matter?
Since my budget is so simple, following my method pretty much removes any ‘spare’ cash I have (i.e. what I have left over after I’ve paid for rent, utilities, food and transport). Sure, I dip in every now and again (I needed a new laptop for example) but when I see the total growing, it spurs me on to carry on being frugal. It also meant that I could replace my crappy old laptop with a beautiful MacBook Pro, rather another crappy laptop that would need replacing in a couple of years.
If you have money here, there and everywhere, it’s a nightmare trying to work out what you’ve got – that’s the beauty of the cash-based envelope system – once the money’s gone, it’s gone. As long as you’re well behaved and don’t take any credit – you’re sorted. You may have to live on pasta, but that’s fine. We’ll call it character building.
I hope that this was of some use to you and stops you feeling so overwhelmed if your finances are a mess (or a bit smug if they’re waaay more organised than mine).
One last thing: does anyone else accidentally spell finances ‘fiances’ from time to time (read: every time)? I always just correct it but when I was writing ‘how to organise your fiances’ it really made me chuckle. I’m sure someone somewhere (perhaps Utah?) would need that information…