My managerial skills seem to take a vacation over the weekends. I just go with the flow of the family.
But on Mondays, I get back to structure. I tie up all the loose ends from the weekend. I make sure all the laundry gets delivered to its owners. I tidy up the kitchen and family room. I look ahead to everything going on during the coming week. And I do all the household paperwork.
By paperwork, I mean that I handle the receipts, bills and budgets. I take all the receipts from the previous week and enter them into my ledger. I pay all the bills that have come in during the previous week. Then I file the papers that need to be saved for future tax purposes, and toss the rest.
(One area I haven't completely made the transition to is online and/or scheduled bill payment. I've got a couple scheduled for online or phone payments, but I'm still working the rest. I have a difficult time going from paper to screen. I prefer to have the paper in my hand.)
If the Monday happens to be the last Monday of the month, I also write up my budget for the coming month. Since our income can vary a bit from one month to the next, we do a combination of two things. We base our next month's budget on the previous month's income, and we carry a surplus forward, to borrow from, as needed.
This surplus that we carry forward from month to month, is our back-up fund. It covers unexpected dips in income. This is not the same as our emergency fund, which covers larger losses in income. But instead this back-up fund covers things like a temporary inability to work as many hours in a month, or paperwork that wasn't filed on time for proper payment. It helps keep our spending on an even keel, regardless of the exact dollar amount of our income.
The greater emergency fund is one we've been building over the past 4 years. When the stock market tanked, around 2008, we felt that wake-up call to build a locally-accessible account. Should we find ourselves with no income whatsoever, this is the fund we'd tap first.
We add to it every month, even if it's just a couple of dollars. This amount is worked into the budget before the month begins. It's not an after-the-fact, what's left over category. This is a fund we keep in a CD at a local bank. It's accessible with minimum wait, in contrast to trying to cash out other investments to use for emergencies. It is still not nearly what all the experts recommend for an emergency cushion. But we're working on it.
It can take years to build a good emergency cushion. We didn't start nearly soon enough. But now that we can see how important it is, we are making it a priority.
How about you? Do you have a system for bill paying, budgeting and saving for emergencies? What was it that kicked you into gear to start up an emergency fund? Do you use online bill-pay? How did you overcome the feeling that you "needed" to see bills on paper?
