Thursday, March 17, 2011

Managing and maximizing family finances


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In some sort of ironic twist, I have become the family financial manager. I say ironic twist because I'm more or less you're typical English Lit major kinda gal and my husband, well, he has the word budget in his professional job title, which should make him the perfect candidate for the home job.

Nope, it's me.

And I don't mind it. I almost like it.

It's true. There is a math geek buried deep inside me that longs to do a little subtraction, division and, when we're lucky, some addition and multiplication. But more than anything, it just makes sense. I do the shopping, I stay at home with my two boys so you could say that I have the time to manage the finances.

But even though I have the time I don't like to waste it. Instead, I like to maximize it and be as efficient as possible. So I do as much as possible online. We have a credit union that has an excellent online banking system and that serves as our hub. My husband has direct deposit for his paychecks so those go right into our account every two weeks. Our credit card and mortgage are through the same credit union so I just have to set up account transfers to pay those bills. Actually, the mortgage is set up as an automatic monthly payment so I don't have to do anything to pay that bill!

For all of our utilities and other regular bills (gas, electric, phone, cable, insurance, etc.) I have electronic payments set up so that when I receive a bill I just go online, input the amount that I need to pay for a particular bill and it is automatically sent on the date that I set. It's practically magic. I don't have to write any checks, fish through my bag for a stamp or worry about the payment being late. 

Aside from the ease of electronic payments there is also the fact that it does save real money. You might not think of it, but saving 42 cents on every monthly bill does add up. I figure we have about 8 bills that we pay each month, so that's a savings of $3.36 each month, or $40.32 each year. EDITED: Suzy pointed out that stamps are now 44 cents, so the savings is even greater: $3.52 each month, $42.24 each year.

Speaking of savings, one other key to managing my family's finances is to make the most of the money we have. My income plummeted (to almost non-existent levels) once we had kids and decided that I would stay home and care for them full time. We need, then, to save where we can. So I do the usual: I comparison shop, use coupons and continue to wear sports bras that I bought back in the 1990s. I also use the power of the Internet to save even more. By "liking" my favorite brands on Facebook, for example, I can often get notice of discounts, coupons or special deals. Similarly, I join rewards programs for brands I buy regularly (like the Stonyfield rewards program that gives me lots of free product just for inputting codes online from their yogurt).

One thing I don't do, and that many experts recommend, is budget. Strict budgets are just too . . . well, they are too strict for this gal. It's kinda like weight loss: Some people say you should weigh yourself all the time to keep your weight in check. But, for me, I prefer to gauge my weight by how my clothes fit.

It's the same with budgeting. I like to go by feel. I try to keep our weekly shopping tab to a certain amount. If I go over it by much one week I make a concerted effort to go under that amount the next week. And if we have a lot of extra things going on one month, I try to keep our spending a little lower the next.

It's just what works for me and for my family.

But what about you? Do you manage your family's finances? Have any tips you'd like to share? Think I'm ridiculous for not budgeting? Share your thoughts in the comments!

10 comments:

  1. I tried budgeting with all kinds of documents at the begining of the year and it became to much of a hassel. I really should do it but ehhhh. As long as the bills get paid and there's a few bucks left in the bank, we're good ;)

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  2. Oh yea, budgeting is a lot like dieting. I say I'm gonna do it and then can't commit.

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  3. Oh, we budget to the penny around here. We are working hard on paying down my student loans and every penny to the loans is less time we have them over our head. I'm a fan of Dave Ramsey on top of it all.

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  4. Oh, and I believe stamps are now up to 44 cents each.

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  5. Really?!? Wow, shows how frequently I buy them -- or not!

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  6. I also pay most of my bills online or through automatic debit. I'd like to do it all from one place, but I have to go to the different websites to get the amounts anyway (no more paper billing), so I might as well pay from there. But I do pay my garbage the old fashioned way, by check, so I think I will look into the online bill pay for them.

    I don't budget either. I get what I get when I need it. What I do though, is pay my bills all at once (for the most part). At the end of each month I go through my checkbook and write down all the payments for the next month. The ones that are automatic debit are easy (cable bill is always the same). There are a couple that I have to wait on. But for most of them I can anticipate what the bill will be. The bills that aren't automatic, I schedule the payment to be just a couple of days before they're due, but I still write them in the checkbook at the end of that previous month. So I earn the paltry interest on that money by keeping it until the due date, but I don't accidentally spend too much money because on paper it's already gone.

    I'm still paying off my school loans, but I don't worry about them. Now that I'm not working at all we can deduct all of the interest we're paying on it on our income taxes.

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  7. Jen -- you can probably have your bank do the garbage payments for you, even if the garbage company isn't set up to receive e-payments. We do that. Basically, the credit union sends a check for us, saving me the hassle -- and the stamp.

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  8. Managing finances may not be exactly be fun for me, but I do somehow like it too, especially when I can see that it is resulting well. Our bills are always paid in full and on time and that we still get to eat good food even if it’s on a budget. Those coupons and discounts are truly helpful and a blessing!

    Hershel Duffey

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  9. “One thing I don't do, and that many experts recommend, is budget.”— Budgeting is really a must for everyone who are with heavy financial baggage. Just like undergoing a weight-loss program, it requires a tight self-discipline. Meaning, lesser spending for the unnecessary stuff that often minimize your overall budget for the month.

    PaddonYorke.com

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  10. Setting a budget and prioritizing important bills are some of the best ways of managing your finances. These would also help to list down all your payments and spending to know where most of your money is going. And, no matter how small it is, make it a habit to save money. Little is much better than nothing at all.

    -Roslyn Rosecrans @ UseFS

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