Either today or tomorrow I plan to do the monthly bills. Each homemaker works out her own system for bills, and mine is to collect everything that has come in from the previous month and settle it out all on one day. I usually deposit my paychecks (being the working person as well) by the first of the month and settle the bills preferably within the first week of the month.
Controlling the finances is one of the primary jobs that used to be standard for a homemaker. The wife always saved as the husband worked. Nowadays, even among stay-at-home wives/mothers, I hear that the husband often retains control of the finances. In this family, however, I handle them. Don't let your lack of control in that area provide an excuse to go soft on financial learning! You should know how to handle money, whether you do or not.
We were in bad shape for a while, since my husband was putting his tuition and books on our sole credit card. He has since switched to student loans, which do need to be paid off. I finally zeroed the credit card balance last month. Let's hope I can keep it that way! A credit card is not evil, and most of them offer at least a 30-day (some, a 60-day) grace period for purchases. I'll use it for online shopping or large purchases, with an eye towards paying it back in full at the end of each month. Never use a credit card as a loan. Don't put more on it than you can pay back each month. If you see something you want that will take a couple of months to pay off, for heaven's sake wait the couple of months and save up for it!
Saving, now that's another matter. It wasn't easy for me to get into the habit of saving. Nowadays, when I do my bills, I place a certain amount of money into savings and pretend I don't have it anymore. The amount that I impress upon my mind as what I have to spend is what is left in checking after the bills and savings have been dealt with. That's worked the best for me. My mother always said that you should have enough in savings to replace a car AND a major appliance, should they happen to go at the same time. I'm nowhere near that, as I couldn't save when I was putting all our extra money into the credit card. Now I'm slowly making progress. Both our cars are old, so I hope I will have the money to replace one before it goes belly-up.
Some people say you should have three months' income saved as your 'nest egg'. That's probably not a bad idea. Of course, being able to replace a car and a major appliance would take about three months' income for me.
I'm embarking on an attempt to keep track of all our expenditures for a month or two. It's tedious, sitting down once daily to remember if you've spent any money and where it's gone, but I hope it will pay off! I'd like to be able to show what percentage of money we use on things like electricity, entertainment, gas, and food. From there I may have a fuller picture of how to budget.
A simple budget is easy as anything to set up. My mother used to have me set them up in highschool, and I quickly started doing it just for fun. I start by listing all my bills, then making categories for each spending type. Then I do a bit of math to see how much money I have left over. I have mine set up in a spreadsheet file with formulas linked together, so that I can add the increased price of gas and my Required Income Level rises automatically.
We're probably considered a middle-class family. Of my gross paycheck, 6% goes to federal income tax, 6% to Social Security, and 5% towards our medical benefits. When the government is done with my paycheck and my healthcare benefits are paid, I have about 80% of my paycheck left. Out of that, about 40% goes to the mortgage payment. After my mortgage is paid, the next highest percentage of spending is gasoline for the cars. We spend more on gas than we do on food. This sort of breakdown not only helps you understand where your money is going, but it may inform your politics!
Next time I finish a post, it will probably be about the second part of finances, which is controlling what you spend. I could take my own advice a little better in this area...
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