Monthly budget management, the EGS way

We’ve gotten some questions about the process we have for keeping track of our budget on a monthly basis.  This is something we are absolutely pumped to share with you, so here goes!

Receipt Inbox

Every time one of us makes a purchase, the receipt for it ends up in a special “inbox.”  It’s basically a basket that I found at Target for like $6 (obviously any container would work fine here).  It’s really important that we have this central place because it ensures that no transaction gets misplaced.  If we make a purchase online, we typically write the date, amount, category (more on this later), and place the purchase was made on a piece of scrap paper, and then put it in the inbox.

Enter into Quicken

There are a ton of options out there for managing your personal finances and transactions.  Truth be told, we would probably use Mint, if it supported our credit union.  Since it doesn’t, we use a well-known software program called Quicken, specifically Quicken 2007 for Mac.  It’s actually better than Mint in some ways, particularly since you have the ability to enter your transactions as you make them.  Several times a week I gather the receipts from the inbox and enter each transaction into Quicken.  Since this Mac Dashboard widget is included, I don’t even have to open the program:

Each transaction gets a payee, payment or deposit amount, category, memo line (we jot down a few notes about the transaction, if necessary).  Here are the categories we use on a monthly basis:

The receipt graveyard

Once our receipts have been entered into Quicken, they go to the place we’ve now affectionately deemed “the receipt graveyard.”  We basically hang on to a year’s worth of receipts, in the event that we need them for making a return or for tax time.  NOTE: all utility receipts, pay stubs, etc. are actually filed away in file boxes. They’re easier to get to that way. At this time I also enter upcoming paychecks into Quicken and our budgeting spreadsheet.

**Don’t have a budgeting spreadsheet?  Download the one we’ve created from an earlier blog post entitled “Our Pain is Your Gain.”

Reconciling in Quicken

At the same time we’re entering receipts and paystubs, we’re also downloading transactions that have already posted to our credit union (see also “Our Credit Union Rocks“) online and importing them into Quicken.  The software then finds the transaction and matches it up, ensuring that everything balances nicely.  If Quicken can’t find the transaction, it lets us know, and we can then figure it out from there.

End of the Month

At the end of each month, we sit down to talk about each category and how we did.  You’ll find that our budgeting spreadsheet includes “target” amounts for each category and month.  We’re using the reporting features in Quicken (they’re really robust) to keep track of how we’re doing during the month, and this is our final opportunity to close the books and see how close we came to meeting our targets.

Conclusions

This whole process is really important to our family.  It (or some variation) will be the way we manage our finances for the rest of our lives.  Our budget is clearly laid out (but subject to changes and flexible, as necessary) and it keeps us on track in terms of saving and repaying our mortgage.  We communicate about spending on a regular basis and that helps us to be accountable!  Whether you’re single or married, newly out of college or with tons of life experience, budgeting is a skill you shouldn’t be without. What’s your process?  We want to hear about it, so leave us a comment below, or send us an email and let us know.