I've made a few goals when managing the finances of our house. Like most people finances stress me out and most times it takes up way too much time. So this year, I've made a few goals related to managing our household finances.
- Take up the least possible amount of time
- Be the least stressful (to me)
Strategies: automating transfers, separating out accounts, and automating credit card payments.
Separate expenses into the following categories: Fixed recurring expenses, variable recurring expenses and ad-hoc expenses.
Strategy: Move variable recurring expenses items into (yearly / monthly) fixed recurring expenses.
Use credit cards to accumulate points / rewards:
- One set of credit cards will be for fixed recurring expenses. Set to auto pay balance in full at the end of every month. Then keep this card in a safe, never to be touched again. This set of credit cards should always have the same balance every month and is paid in full every month.
- Another set of credit cards will be for variable recurring expenses. Set to pay the minimum required balance at the end of every month. This is the set of credit cards that you carry on your wallet.
Split expense budgetting to be more precise eg. Grocery bills can be further split into fixed recurring (ie. things that you buy every month) and variable recurring ie. everything else.
Calculate the total amount of fixed recurring expenses and distribute against paycheques. Align transfers and savings to paycheque frequencies, if your paycheque comes in on a Thursday (bi-weekly):
- Retirement savings should be taken out (automatically) the on the Friday
- Automated transfers to short / medium term savings on the Friday
- Automated transfers to transfer funds for fixed recurring expenses on the Friday
Create an understanding of your yearly expenses (ie. How much do you spend in Jan, Feb, March etc). Move yearly recurring to the months with the least spend. ie. We seem to spend the least in May so yearly recurring expenses like our Amazon Prime, CrunchyRoll subscriptions are paid then.
Strategy: Minimize ad-hoc expenses, but set targets and alerts.
Use mint.com to set targets / budgets and setup weekly alerts of spending.
Strategy: Batch things as much and as early in the month as possible (ie. Do the same tasks at the same time every month).
Call credit card companies to have you due date adjusted to the same time each month. We changed ours to be due at around the end of the month. Since the credit cards are all due, we have a calendar entry on the 12th of each month to gather each credit card bill proactively.