This is the way I keep the books

Confession: I’m a wee bit of a control freak.  Which would explain why I’m the one responsible for the household bookkeeping.  I have been using the same method to balance the budget since I was sixteen years old and moved in with Torri’s dad right before she was born.  In fact, Torri’s dad was the one who taught me to budget, using a very scientific method that Jeff has since tried to upgrade, but time and time again I’ve had to tell him that fancy shmancy financial software programs would only complicate matters.  I’ll stick with the easy way.

Easy according to this technically-challenged neanderthal, anyway.

My budget runs month to month.  Right around the first of each month (or maybe the 30th of the previous month if I’m ahead of my game) I label a blank 4×6 card with the heading: July Bills.  Or February, or April.  You get the idea.  And then I proceed to list our expenses for the month, always using the previous month’s card for a guideline. If I have the date available, I list the due date of the bill (expense) alongside the amount due.  Once I’ve finished, my card looks something like this:

*These numbers are completely random - not our real budget*

Once the expenses are listed, I flip the card over and list income.  Like this:

*These numbers, too, are completely random and do not reflect our real income. Unfortunately.*

As the month goes on and expenses are paid, I cross them out one by one.  So, too, do I cross out the income as it comes in.  I also have a handy dandy little white out tool that I use to change ongoing expenses.  For instance, halfway through the month my grocery budget changes.  I white out the old amount and mark in a new one to reflect how much money is left in the food budget.  I also keep a running total of my Discover card balance on my bill sheet.  About halfway through the month, the card would look like this:

The beauty of this method is that by adding the remaining income to my current checkbook balance, and then subtracting outstanding expenses, I can get a quick idea of how much money is left in the account to “play with,” which, unfortunately, is never enough.

One more tidbit: I also start each month with a blank card titled “Discover Card – July”.  Every single time I use my credit card to pay for something, I write down the amount and the name of the retailer/establishment.  I regularly go online and reconcile my little 4×6 card with the charges on my credit card account, placing a little check mark after each one is accounted for.  Like this:

I actually run up quite a bill on my credit card each month, but I always know exactly (to the penny) how much money I owe.  We charge everything: gas, groceries, you name it.  EVERYTHING.  At the end of the month I pay off the balance in full a couple of days before the due date.  I cannot tell you the last time I paid one red cent in interest charges.  Why do we charge everything?  We earn between one and five percent cash back on all of our purchases.  I let my cash back bonus accumulate throughout the whole year and then use it to buy Christmas presents.  Last year, by December I had over $750 of “free money” to spend on Christmas.

Why am I telling you all of this?

Because I’m curious as to how you budget.  Do you use financial software?  Or do you take a more rudimentary approach like me?  Do tell.

Oh, and, if you’re curious about our budget, check back tomorrow.  I’m spilling the beans about where our money goes.

27 Replies to “This is the way I keep the books”

  1. Oh sister… I am quite meticulous about the money, too. I use excel, though. We have extensive spreadsheets full of charts and stuff. We lay out the budget pretty much the same way you have only ours is electronic. All of the expenses are plugged in as we go, and it automatically totals what we’ve spent and what we have left. Love it.

    I also calculate our net worth each month. It is interesting to see how the market effects our investments, how the real estate market effects our home value, etc.

    1. Calculating the net worth every month seems like a hugely daunting task! Jeff has some fancy spreadsheet for keeping track of the investments, but wow-going so far as to factor in home value even. That’s awesome!

  2. I’m impressed — my way of keeping the books would probably make you and Kristen cringe. There is no method to my madness unfortunately. We really should do a better job of budgeting b/c half the time I come home from Target and couldn’t really tell you what I spent. Oy!

  3. I don’t have a budget written down! Every time I write one down, my dh says that I forgot to budget for gasoline for the lawn mower! Geez…anyway, I love, love, love my Discover card! Dh and I have separate Discover accounts-we both opened them when we were single and never applied for a joint one. We charge everything on them and we’re visiting Magic Kingdom and Universal for one day each on our trip this year and our Cashback Bonus will cover most of the ticket prices!

    I’ll get better about the budget…

    1. I LOVE Discover, too. Do you ever use Shop Discover? It’s a quick and easy way to plus up that bonus. I also use secure online account numbers often. Makes me feel safer about online purchases!

      1. Yes, I use ShopDiscover as much as possible! I like the extra cashback from it and I don’t know if you have daily deals like Groupon in your area, but ShopDiscover now has a Groupon link that makes them even cheaper.

  4. I do a budget every single month. I took the Financial Peace classes through my church. The ones with Dave Ramsey? I also taught a few of them to hold myself accountable. Instead of using the forms that he provides I just may one on excel. It is very similar to yours. I know where all of my money goes every month and always somehow end up with extra. I think that I learned that from you though. Always round your bills up. :)

    1. I’m hearing a lot about these Dave Ramsey forms. I’m not familiar with that at all. Might just have to google…

      I’m glad my “rounding up” rubbed off! Miss you Cor!

  5. Since we’ve been married, we’ve used a couple of different ways. At first we used a program combined with an Excel doc that we tracked every penny out in. The program showed us what was in the checking account and other accounts and the Excel document helped me see where we could spend less. We were super meticulous and would make a goal of making every number smaller each month. We even worked off rent when we could. Now we don’t use the Excel doc anymore. And I don’t do the finances anymore. My hubby does them because I was getting too stressed out with that and the kids. He tells me how much I can put on the credit card each month and part way though the month tells me if I need to tighten up. We put everything on a card that is linked with the Thank You Network. Through that we get rewarded with a check to the company we have a student loan through. Every couple of months we get to pay a little extra off on the student loan and get a little closer to being debt free (well, besides the mortgage, but once we’re done with the student loan, we can use it to pay off the mortgage if we want to).

    1. I’m being more and more swayed by all the perks of a fancy electronic budgeting method. I might just have to sit back down with the mister and try it again!

      PS. I’m like you in that I would totally use those numbers to challenge myself to beat last months totals!

  6. we’re pretty rudimentary too. Most of our monthly bills are static and don’t change so we have most everything set on bill pay. We charge nearly everything else to a discover card too…love the rewards…we use them for Christmas too!

    We use the online analytics tools available at to help determine how much we have left to spend each month. we just check it once a week or so and we have a discriminate spot on the calendar where my hubs writes the amount we have left for the month so I know whether we can splurge on an extra eating out night or something for the house/myself/the kids or not.

    1. See, now this is so me…especially that last sentence. Only I’m the one determining that “extra” amount. And, man! I thought I was being all creative with the cashback Christmas fund. Not so much, eh? ;)

  7. We use Dave Ramsey’s Gazelle budget. It has worked so well for us, although we are still not staying within our cash each month. We don’t use credit at all and try not to use debit as much as possible.

  8. This is a really great post! I use an Excel spreadsheet and I keep a running budget 6 months in advance. I have all of the expensive listed out and use the Excel autosum feature to add it all up which is great because the total automatically changes as I move things around. Then I subtract our paycheck amounts from the total debt amount and I can see what we have left. I also budget our spending money. We get the same amount of spending money each pay period and we pull it out in cash on payday. When the cash is gone, so is the fun. LOL
    We can’t use any credit cards because we have actually been on a debt management plan for the past 2 1/2 years. When I got laid off in October of 2007 and was out of work for 6 months we racked up credit cards to pay for everything and ended up in BIG trouble (to the tune of 30k in CC debt with horrible interest rates). We joined a debt management plan who canceled all of our credit accounts and negotiated low, stable interest rates. We pay them a lump some each month plus a $30 fee for the service and they pay all of our debts. As one is paid off, that monthly amount rolls over to the next account with the lowest balance. We’ve got one more year to go and everything will be paid off! I can’t wait!

    1. Oh wow, Christina. That’s really impressive that you were able to get out from under such a huge debt so quickly. Good for you! Lots of people wouldn’t have been so responsible.

      I’m seriously impressed by your six-month out budget. That’s crazy cool. I have a emergency savings spreadsheet that sounds sort of similar, but I can’t imagine all the moving parts of doing the same thing for the monthly budget. I’m such a pen to paper kind of girl, but often times, when Jeff convinces me to “automate” a process I find it easier than I thought it would be. I’m seriously considering taking another look. Get myself out of the ice age! ;)

      1. Thanks Darcie – it’s been a long road! I do highly recommend Excel though – if nothing else, it does all the calculations for you!

  9. I’m just like you! I know how much money we have and owe to the penny at any given moment in time.

    I pay bills twice a month, each time a day or two after my husband gets paid.

    We use our check card for all purchases and reconcile my paper check register with our online banking account. I, too, pay my credit card balances in full otherwise I can’t sleep at night. If we can’t afford to pay the balance in full then we don’t buy it in the first place.

    One other thing I do after each bill pay session is text my husband to let him know how much we have in checking and how much we have in savings so that we are both on the same page.

    Even when I’m stressed about not having enough money I always feel more at peace when bills are paid and everything is reconciled, don’t you?

  10. I’m an excel spreadsheet budgeting girl. I budget 12 months in advance. For instance, we have an insurance bill that is only paid 9 months out of the year. Those other months, I can use that money towards something else. I can then also budget for months in which we have a lot of extras. Like September – birthdays for both our moms, etc. The excel spreadsheet quickly adds up what’s coming in, and what’s going out (including into savings). When I pay a bill, I put an x in the paid column. When it’s taken from our bank account, I put an x in the cleared column. Unfortunately we are still playing a bit of catch-up from M’s job loss two summers ago. But with my spreadsheet I can easily see which bills are being paid off and how much is left to go. One of my spreadsheets shows all of our debt and the balances. Including cars. Then when the car payment is paid off, I budget ahead what is going to be paid off BEFORE we purchase a new vehicle. At least once per month, I take paper to pen to see if my plan is really working. LOL

    I never balance my checkbook. You’re probably having heart palpitations. But I always know the amount in our accounts and my spreadsheets keep track of credits/debits.

    I wish that I was a control freak. Maybe my house wouldn’t be so cluttered!

  11. I was just telling Steve yesterday how envious I am of your Discover card responsibility. I could never do that.

    I have an excel spreadsheet that I have been using since we got a computer. Every few months I sit down and record our forecasted money in/money out, and adjust it as needed. I know this is going to make you cringe, but we use our bank account to tell us how much we have left. We use our debit card 100% of the time, and refer to the balance daily.

  12. I have slowly graduated over the years from a columner pad, to excel, to MSMoney to YNAB for budgeting.
    Love YNAB (You Need a Budget) because it has you plan next months expenses from this month’s income, getting you one month ahead and not on the paycheck to paycheck method that so many people live with.

  13. Tim & I have “taken turns” with the budgeting over the years, although we both always have an understanding our financial status. Ever since having kids, Tim has pretty much taken the reigns (which I am grateful about). He mostly uses online tools to track our spending, pay our bills, etc.

  14. Okay, I commented on the next post before I read this one. I see that the pie chart was not your normal mode of budgeting. Hey, whatever works! And it seems like it is working! I use Excel and every January I make a spreadsheet for each month (yes, all 12 months). This helps me because some months have special spending (like back to school stuff, Christmas, birthdays, etc). I try to update my checkbook and excel sheet at least weekly, if not more. So pretty much always I know to the penny how much money we have and how much more we need to spend for that month. Or the rest of the year.

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