Monday, December 29, 2008


In my third and last post of the day here, I want to explain my routine financial checks, because I'm not sure if I have before - very remiss of me, if not! A regular checking system is vital to good financial health.

It takes me about 10-15 minutes to establish my current financial position, to reconcile transactions since my last check and to make reliable financial plans for the upcoming days and weeks. By doing this every few days, I can make sure there will be enough money in my account to pay bills (mostly by monthly Direct Debit), keep an eye on any overspending and check that my financial identity hasn't been compromised.

I use telephone banking to get my balance and recent transactions, noting all this info on a dated page in my A4 diary. Then I check the outgoing payments against the receipts in my purse and make notes of all spending. The direct debit payments and regular incomings are scheduled on a wall calendar that I keep specifically for the job, and I tick off planned payments on there as they come and go. Then it's a simple sum to subtract planned payments from the balance plus expected income: the remaining amount is what I know can safely spend when shopping. I usually divide this amount into weeks and keep the weekly figure in my mind to try to avoid overspending. If I do overspend one week, I know I must compensate the next week.

I've been able to lend money in emergencies to friends who were on ten times my income (with less than half the number of children!) in the past, by keeping track of my finances in this way. It's something that people on very low incomes have to do in order to make ends meet and I think this necessity is an advantage, because it's good to spend carefully and to know how much money you've got.

This kind of financial management isn't taught in schools, is it? But it should be - it's one of the most vital lessons a young person can learn, I think.


Blogger these boots said...

I know you're completely happy with your method, but for those people who might be searching for a computer-based method, can I recommend You Need a Budget.

This programme (I'm using the 'pro' version) has turned my financial planning around. And there's a really supportive community forum to help out with all aspects of budgeting.

It's basically what you're already doing on paper, and, once you've invested the time and faff into setting it up, you can maintain it for around 15 - 20 mins a month. The software makers also place an emphasis on the importance of *discussing* and understanding the budget with the whole family.


December 29, 2008 at 5:23 PM  
Blogger Gill said...

Thanks Lucy - I kept meaning to look at that but you're right, I'm happy with my old, Luddite ways for now. Very handy link to have here though. :-)

December 29, 2008 at 5:47 PM  

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