Grant Baldwin’s Blog

In this series, I will be walking through tools, systems, and routines that work for me in various areas of my life.

If you know much about me, you know I’m a huge proponent of paying attention to your money instead of sticking your head in the sand and hoping your money takes care of itself. So today, I’ll share some specific things we do when handling our money.

• Stick To A Budget – Creating a budget is step one for taking care of your money. Every month, we create a new budget within Excel for that month’s income and expenses. Even if it looks exactly the same as the previous month, we make a new budget for THAT month.

• Pay Cash – We use an envelope system (see below) to pay cash for several of our monthly expenses. After we create our monthly budget, we take out cash for the month for certain categories such as restaurants, clothing, gas, groceries, etc. We put this cash in separate envelopes for each category, so when we need to purchase something that falls within one of those categories, we use the cash from that specific envelope. This limits your spending and helps you stick with your budget.

• Have An Emergency Fund – We have an emergency fund set up that is used only for emergencies…thus the name. Brilliant isn’t it? Having this set aside where we don’t touch it gives us a buffer so that regardless of what the economy is doing or if we’re having a good or bad month for the business, we know we have some breathing room.

As for the tools to carry these things out, I use a couple of resources:

• Microsoft Money – I have used Microsoft Money for a while now and like that I’m able to track both our personal and business finances there, but still keep them separate. My only snag right now is that this is obviously a PC program, and so I’m having to currently run it on my Mac using a program called Parallels. So far I haven’t found a simple and functional Mac money program that has what I need. So for now, we’ll keep using Microsoft Money.
• Banks – We use Commerce Bank for all of our day to day finances. We have a checking account for our personal finances, a business checking account, and a savings account that we use. We also pay all of our bills online through their free bill pay service. Most local banks (Commerce included) have horrible interest rates for saving accounts, so we keep some money in an HSBC Direct account. There are several online savings accounts you should look into that pay 2.5% or more. Here are a few: FNBO Direct, E-Trade, Dollar Savings Direct, or ING. Within HSBC we have 3 savings accounts: our emergency fund, tax savings (money set aside for our quarterly tax payments), and a miscellaneous savings fund which we use when saving for major expenses such as a vacation or a new car.
• Microsoft Excel – I use various spreadsheets within Excel to track different aspects of our business finances and also create our monthly personal budget on Excel.
• Envelope System – Because we pay cash for so many of our expenses, we have a simple little envelope system we picked up from Wal-Mart that works just fine. We label each folder and put the cash in there for the month.
• Turbo Tax – I’m a huge fan of Turbo Tax and have done our taxes through them for several years now. In fact, I’m essentially already done with this years’ taxes but am just waiting for all the 1099s and paperwork to come in! Read more of my love for Turbo Tax here.

Tomorrow, I’ll wrap up this series and talk more about resources that I use on a regular basis including magazines and websites.

What tips can you share for how you organize your finances?

Related posts:

1. How I Handle My Business Income
2. Stop Paying Stupid Bank Fees
3. Why You Should Reevaluate Everything…
4. 7 Rules Of Credit Card Ownership
5. In Case You’re Bored This Weekend…Episode 5