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Taking care of the family (or your personal) finances is a very important responsibility. And if you are the one that normally handles that part of the house, then you know how everything involved with it can really pile up if not done on a regular basis.
That is why there are three things I do every day for our family finances – to both save us time in the end and to be sure we don’t get so far off track that it’s a tough process to get back on. When that happens it often costs us money!
Now, to be completely honest, I don’t always get to each of these tasks everyday, even though I always strive to. Sometimes I get busy or forget.
And that’s ok because if I can get to them at least every couple of days, I am still able to keep up with it. But daily is my goal!
Side note: my husband doesn’t care so much to take care of the finances but I love to do it! And so in this post I talk a lot about what I do even though it’s for our entire family and my husband is on board with it all 🙂
The following are the three things I try and do everyday to be sure we stay on track of our finances:
#1 Track our spending
If I don’t track what we spend on an almost daily basis, I get very behind and it’s often a tedious process to get caught up. (I’ll share more on how I track our finances soon.)
You might be wondering why it’s important to track what goes out (and for that matter, what comes in) to your bank account. After all, if you use electronic forms of payments then it’s all recorded online for you. All you need to do is log onto your bank account and you can see all of your activity. So what’s the point?
Although there are many reasons as to why we track our spending, the following are two common ones:
To know where we’re at within our budget
This is the number one reason I track what we’re spending.
If I wasn’t keeping track of every transaction we make, then there is no way to know whether or not we’re staying within our budget. And if that’s the case, then we will almost certainly overspend our income for the month.
Because I record all of our spending, we know exactly how much money we have left in our budget to spend for the month.
So we don’t accidentally spend money we think we have
Often times a transaction on an account is in preauthorization status before it actually posts to the account. The amount of time it’s in preauthorization status is up to the merchant.
There are many times the transaction will “fall off” the account before it finally posts. During the time in between when it falls off and when it posts, it will not show up when logging into the bank account line.
In fact, it might not even show to the bank teller!
When I worked at the bank, a client asked how much money she had in her account and we told her what we saw.
There just so happened to be a transaction that had fallen off and we looked at her account before it posted.
Once the transaction posted, her account went into overdraft because she had spend that money elsewhere.
Had she been keeping track of her spending on her own, she would have known exactly how much money she actually had to spend.
To be sure there isn’t fraud on our bank account
I used to work at a bank and saw first hand just often fraud occurs. It makes me angry but it is a reality.
So often clients would not notice the fraud until far down the road because they just didn’t pay that much attention to their finances. By the time they saw it, it was sometimes too late to file a claim. Other times they weren’t one hundred percent sure it was even fraud and that they didn’t actually make the purchase themselves.
There’s only so much time to fight the charges and so you want to catch it as quickly as possible!
How I track our spending
I love to use Dave Ramsey’s EveryDollar app for both creating our budget and keeping track of our spending. It’s very user-friendly and organizes our finances so well. I can also just pull out my phone and record a transaction as soon as it’s made. It couldn’t be easier!
Although there is a paid version that will automatically track electronic purchases for you, I use the free version. I love to input my own spending because it gives me ownership of the financial moves we’re making and helps me see first-hand where our budget is at.
Although I record all of the spending in our house, each family member that shares in the budget can record their own spending on the same app if we choose.
#2 Balance the checkbook
Same as tracking our spending, I add transactions to and balance our checkbook almost daily so I don’t get too far behind.
Now don’t let the term “checkbook” confuse you. It may seem outdated, but really it just means you’re paying attention to everything going in and coming out of your bank account.
This will help prevent bank errors and fraud on your account. It will also be helpful in case you have any transactions that have been hanging out there for awhile and for whatever reason, never went through.
This is not the same as what I use the Everydollar app for. Everydollar is for keeping track of our budget. It does not give me a total amount that is in our bank account.
I use a checkbook register app to pay attention to our bank account and log into the bank online to balance. What I love about that is I don’t have to wait until the end of the month balance our checkbook like not too long ago. Instead, I can balance it everyday if I want to (and I usually do!).
The thought of balancing only once a month actually makes me feel dizzy! That’s just too much as one time for me. Plus, I have a better idea everyday of exactly how much money we actually have.
#3 Review the budget
As I already mentioned when I discussed recording our transactions, I review where our budget is at everyday.
At the end of the day or in the morning, I can just log into EveryDollar and take a look to see how much money we have left to work with for the month. I can also see what bills still need to be paid. This keeps us accountable to our spending and making sure we spend within our means.
Although there are many important tasks we do for our finances, these three steps are very important to help our family stay on track of our money, including what we have in the bank and whether or not we’re staying within our budget.
We don’t always get it perfect, but we get closer every time!
Is there anything you do everyday for your finances? Please share in the comments below!