Finally get all your budget process organized with this guide to annual, quarterly, monthly, weekly and daily budgeting tasks.

A Comprehensive Guide to Organizing Your Finances for a Brand New Year

 

Finally get all your budget process organized with this guide to annual, quarterly, monthly, weekly and daily budgeting tasks.

I would say I’m a pretty typical nerdy accountant. I enjoy debits and credits, at least when they balance. I have an unusual fondness for buying office supplies (especially pens and pencils).  By now, you probably already that I’m obsessed with spreadsheets. So…you can probably guess that organizing my finances is something I rather enjoy.

I always make at least one improvement to the way I organize or track my finances each year.  I have a great system now that minimizes my time both in tracking my information and in finding my information when I need it later as well. This year, I’m going completely paperless, starting with my monthly and annual budget and cash flow tracking.

It’s so simple and easy to set up a digital system for managing your day-to-day financial information. I already track my income and expenses electronically in YNAB, so the big change for me this year will be keeping all my monthly bills and statements organized in digital folders by month.

In the past, I’ve followed more of a hybrid digital and paper system, but I’ve been working on scanning in years of financial information to reduce the unnecessary paper clutter and want to avoid that altogether. I love having records of all my past expenses so that I can refer to them later and see my progress.  I don’t love storing and sorting through boxes looking for that one thing I need (and sometimes still not finding it!).

SETTING UP A PAPERLESS CASH FLOW SYSTEM FOR YOUR BUDGET

This year, I’ve set up a master folder on my external hard drive named “2017 Budget & Cash Flow” with folders for each month. Each month includes income, expense and statement folders. The documents are included in the appropriate naming convention (from my accounting years) that starts with the year_month_date and then a description. The date in the file name is the due date of the bills or the date of the payment.  When writing the description portion, I make sure that I include the name that I would search for when trying to find the bill later (such as the vendor name or product).

Each month will look something like the example below.

I included a downloadable link to this folder system in my previous post about setting up digital financial binders.  Just download the zip file and you’ll automatically have this whole structure set up for the whole year!

This system makes it so easy to search for these documents later and see clearly which document I need. Whenever I need to go back to those paychecks to calculate my tax projections or find that credit card bill to figure out the date for a transaction, I can quickly search my files.

In addition, I also backup my files to Dropbox.  It’s so easy to simply copy and paste the entire folder or you can even set up Dropbox to automatically sync the folder so that it’s always backed up to the cloud (that’s what I do!).  Google Drive is another great option, as it also has a desktop app that you can use to directly copy and paste the entire folder.

To get started you’ll want to:

  • Electronically login to each account and select the paperless option for your bills and statements.
  • Scan in any previous paper bills for the current month/year to be consistent.
  • Set up an online cloud system as a backup for your financial information, or at least an additional hard drive or USB

ANNUAL BUDGETING TASKS

At the beginning of each year, the first thing I do is review my financial goals.  My financial goals don’t change a lot from year to year, but it’s important to keep everything in perspective when setting an annual budget.

I make a zero-sum budget for the entire year using my budget spreadsheet template.  I find this step important because there are often periodic payments that need to be made at different times during the year (for example, semi-annual auto insurance premiums, property taxes, and Christmas gifts).  I also want to know in advance just how much money I’ll have left after meeting our family’s needs to be able to allocate to savings goals.  At this point, I update the amounts of my automatic contributions to my monthly saving goals including retirement and college savings plans based on my updated annual budget.

Since I’ve converted to a paperless system, I made a PDF copy of this initial annual budget and put it in my “2017 Budget & Cash Flow” electronic folder.  I adjust the spreadsheet throughout the year, so I like being able to go back to this original copy and see what I had originally budgeted for the year.

Time to Complete Beginning of Year Budgeting Tasks: 60 minutes

At the end of the year, I review my cash flow statement (which will automatically be compiled from my monthly cash flow statements in the spreadsheet) and I compare the actual cash flow for the year to my initial annual budget.

I do admit that I tend to focus mostly on what I can improve for the next year with regards to my spending and saving, but I do also look for accomplishments during the past year. Perhaps it was meeting my savings goals or spending less on entertainment than I had budgeted.

Time to Complete End of Year Budgeting Tasks: 30 minutes

QUARTERLY BUDGETING TASKS

At the end of each quarter, I quickly review my financial goals as related to my spending for the year so far.  I make adjustments to my projected annual budget as well if there have been any changes to income (such as a raise or bonus) or to expenses (such as a home refinance).

There are two other tasks that I complete as well after my quarterly investment statements come in (to my email because I’m paperless!): calculating my net worth using my nifty net worth spreadsheet and determining whether I need to make any adjustments to my investment accounts.

Time to Complete Quarterly Tasks: 30 minutes

MONTHLY BUDGETING TASKS

At the beginning of each month, or preferably the week before the new month starts, I fill out my monthly budget amounts in YNAB. I generally start with the previous month’s budget and then adjust for any changes I know need to be made for the month.  For example, depending on the season I adjust my electric and gas bills.  Living in Michigan means that my utilities change drastically between winter and summer months.

My monthly budget tends to differ from my annual budget because my annual budget is based on cash flows and my monthly budget also takes into account saving each month for future expenses like my auto insurance premiums, which I pay semi-annually.  So for example, I might have $100 budgeted per month for auto insurance, but actually, I pay $600 in cash every 6 months.

I am very flexible with my budget.  I change it often during the month to reflect things that come up and the actual bills that come in.  If I see that by the middle of the month I’ve used up 75% of my grocery budget due to having people over for dinner more frequently or some other reason, I will put in some additional money to that budget item.  This discourages me from setting myself up for failure the rest of the month.  However, since I have a zero-sum budget, it forces me to take that money from a different category in my budget (such as savings items).

Time to Complete Beginning of the Month Tasks: 15 minutes

Once a month, I also have some month-specific project that I’m working on related to my finances.  In January it’s creating a budget for the new year.  In March/April, it’s gathering my tax information. Throughout the year, I like to check up on my college savings or retirement plans and see where I’m at. Completing at least one personal finance project a month will help you to complete a complete financial plan.  Other ideas for monthly projects include checking insurance coverage and obtaining quotes, analyzing potential investments, and creating a will and estate plan.

Time to Complete Monthly Project Tasks: varies depending on project

At the end of the month, I adjust my budget to reflect the actual amounts of my bills and make adjustments to the day-to-day expenses to reflect whether I want a carryforward balance in some of those items.  For example, if my grocery budget was $500 for the month and I only spent $450, I might keep that $500 as the budget total for the month, since YNAB will carry forward the remaining $50 to the next month.  Or, if I don’t think that I need that extra $50, I may instead adjust the budget for the month to $450.  That frees up $50 to include in another budget line item (like more toward a specific savings goal!).

Then, I transfer the ending actual spending numbers from the YNAB software to the “actual” spending column on my own budget spreadsheet template.   This is my cash flow statement for the month.  At the end of the 12 months, my spreadsheet will automatically pull in all the monthly numbers and total up the entire year.

Time to Complete End of the Month Tasks: 20 minutes

WEEKLY BUDGETING TASKS

I have automatic payments set up for every single bill that has the option. So, my regular bill paying process is very minimal.

When my bills are received (generally I get a notification that there’s a new bill available through email), I file my bills put the electronic copy of the bill in the electronic folder for the month, but not yet filed into the “Expenses” folder. This signifies to me a bill received but not yet paid. Occasionally, I get a paper copy of a bill, such as a medical bill.  I try to scan these as soon as possible after receiving them to keep my system consistent. When I get a new bill, I enter the amount as an upcoming transaction in YNAB (there is the feature to schedule future transactions, which I love!).

I check weekly to make sure I have enough money in my checking account to cover the bills for the week and move the bills that have been paid to the “Expenses” folder. I also pay any other bills that aren’t set up for automatic payment during this weekly budget checkup.

Time to Complete Weekly Tasks: 15 minutes

DAILY BUDGETING TASKS

Because I use the online version of YNAB that automatically pulls in my bank and credit transactions, I don’t have to spend a lot of time tracking my expenses.  Expenses are automatically categorized based on my previous entries, so I only have to categorize expenses when I go somewhere new or need to split the transaction into categories (such as at the grocery store if I buy a variety of items).  I do have to “approve” the imported transactions in YNAB, which I appreciate because it makes me look at each transaction to make sure I know what I’m spending (but without having to manually enter, which I feel provides no value for me).

I’ll be honest-I almost never do this on a daily basis, but I generally do this at least twice a week.  At the very, very least if I’m especially busy, I go through my transactions weekly when going through my bills.  Before I make any large purchases, I make sure my budget is up to date and I know exactly where I stand financially.

Time to Complete Daily Tasks: 5 minutes

FINAL THOUGHTS

Organizing my finances and creating a consistent process for managing my money has provided me with the information I need to set clear financial goals AND achieve them.  It has meant the difference between arbitrarily setting aside money for the purpose of saving and being on track to meet every retirement and college saving goal that I’ve set.

Managing your finances takes time, but it’s time well spent. When you are regularly tracking your expenses, you are able to adjust your spending habits and make sure you are making your money matter to you.

To get you started, I’ve included a printable checklist for all these tasks, can be downloaded by clicking on the preview below.

Do you follow a set process for completing personal finance related tasks on a regular basis?

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6 Responses

  1. Very good website you have here but I was curious if you knew of any
    forums that cover the same topics discussed here? I’d really
    love to be a part of community where I can get responses from other knowledgeable individuals that share the same interest.
    If you have any suggestions, please let me know.
    Thanks a lot!

  2. I have to admit that I thought I was organized with my finances but you are teaching PhD level courses when it comes to organization 🙂 I usually only go out about a month or two with our budget but a zero based budget for the whole year is incredibly impressive.

    I don’t know if you’d get picked up or not but you should definitely share this on Rockstar Finance.

  3. Dang, that is some next level organisation!!!

    To keep on top of things I’m aiming to log onto my internet banking every day this month, track expenses (done in my internet banking, all built in), do any transfers as needed, etc. I pay bills as they come due (I get them all by email) so I’m making payments quite frequently.

    1. That’s awesome that your bank has expense tracking built in. I’ve seen one or two like that in the US, but have things so set to with my current system that I wouldn’t probably use that feature. Tracking your expenses is seriously the most important thing you can do to improve your finances-kudos to you!

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welcome!

I’m Kathryn Hanna-wife, mother of 3 and a Certified Public Accountant. I love to budget (really, I do!) , build spreadsheets and spend money on travel, sewing supplies and good chocolate.

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