All posts by Kurt Kirton

About Kurt Kirton

Song and book writer from MS now living in Nashville, TN. Marketing and graphic design background. Regular blogger on topics surrounding the subject of job searching. View all posts by Kurt Kirton →

MOOLAH MONDAYS: Workin’ the System Part II

December 4, 2014Budgeting & Moneybudget, cash, checking account, credit card, discretionary income, money management, overdraft, overdrawn, paycheck, receipts, spending, want list, wantlistKurt Kirton

budget, money management
Using this system, at the end of every month, or after your last paycheck for the month, do what I call “Paying Yourself.”

1. Total up your paychecks in the “Pay” section of your Tracking Budget. This is how much you have to work with for the next month.
2. Anything you paid for with cash – Handle this by referencing your ATM receipts and subtracting your ATM cash withdrawals from the Tracking Budget and on your checkbook register. (I recommend writing how much cash is intended for what on ATM receipts).
3. Sort your mountain of receipts into groups by the sections of your Budget (eg. Gas, Food, Me; and ATM separately), sum and subtract the totals of what you spent in each category from your Tracking Budget. See #3 below about credit card purchases.
4. Anything you paid for with your credit card – Subtract it from the respective section (for example, subtract the total of all your grocery receipts from Food), and add each total up to the “Credit Card” section. Then, I get a master total of all my credit card receipt piles and add that total up to the “Credit Card” section. When the cc bill arrives, I pay it out of the “Credit Card” section.
5. Get a new total for each section on your Tracking Budget. This way, you can see where you might have gone over/have a negative balance in that section. An example cause of this would be the shortfall from that leather jacket you bought, or that from spending more money on gas than you thought you would last month.
6. Now that you’ve dealt with everything you spent, reference your Planning Budget, and allot the amounts there by writing them into the respective sections of your Tracking Budget adding money to each. (Make sure to subtract all of the Pay section from itself. For example, $1800 – $1800=0 since you are distributing the full amount into sections of your budget.)
7. Ideally, you will have made more than the total of your regular expenses. Before you have a party about your discretionary (leftover) income, use the leftover cash to absolve any of the negatives we talked about in #5.
8. Anything you’ve got left after your negatives are taken care of is your final discretionary income. You can save that, spend it, or some combination thereof. Fun, fun, fun! Log how you’re using this money into your Tracking Budget. Time for totals…
9. Total 1 – You’ll get this from balancing your checkbook.
10. Total 2 – Get a full total by adding up the sections of your Tracking Budget.
11. Total 3 – Your Checking Account Statement total
12. Write total 1 and 2 on your checking account statement so you can see 1) Checkbook Register total and 2) Tracking Budget total vs. 3) Checking Account Statement total. Honestly, my 3 totals rarely equal, but as long as my Tracking Budget total is equal to or greater than my Checking Account Statement total, I’m happy since I spend based on my Tracking Budget.
13. If the total from your Tracking Budget is more than your checking statement shows, be careful as you spend for the forthcoming month. For some reason your budget shows more than your bank says you have. You may have subtracted something from one section and not added back to another. (For example, I’m guilty of subtracting something from say my Vacation Fund and forgetting to add it up into the Credit Card section of my budget.) Try to get these 2 totals to always equal since you’ll ideally want to spend based on your Tracking Budget not your current checkbook register total or online account balance.

WRAP UP – After “paying yourself,” put your pile of processed receipts in a different drawer, box, bag, etc., and at the end of that tax year along with your tax return paperwork, box them up, label, and store them. I like to group my ATM receipts together with any old checkbook registers and bank statements.

HOW OFTEN? – If you’re disciplined with your money, you can pay yourself and process receipts at the end of each month–this is by far the easiest way to do it. If not, you’ll need to do receipt subtractions more often to avoid overspending. For example, if you subtract what you’re spending on yourself in the “Me/Spending” section every week, you’ll easily see when you’re running out of pocket money for that month and can adjust. (Slow down spending on the fun stuff!)

FRESH BUDGET SHEET – When your Tracking Budget starts to get full, get a current total for each section, and start a fresh one, putting the date in the top corner. File the old one in with your processed receipts.

I know this process sounds very involved and may seem confusing, so check out this nifty to see the monthly “Paying Yourself” process in action!

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MOOLAH MONDAYS: Workin’ the System Part I

November 20, 2014Budgeting & Moneybills, budget, budgeting, checkbook, debt reduction, discipline, discretionary income, earning, expenditures, expenses, finances, money, paycheck, receipts, saving, spending, stress reduction, system, tracking, want list, wantlistKurt Kirton

budget, system, spending — Photo by Annafur

Ok. So after the last post you know why it’s nirvana to live 1 month ahead and why you should create 2 Budgets, a Wantlist, and a list of Regular Yearly Expenses. Well, “What now?” you may say.

Buy what you need. Don’t go too crazy buying leisure stuff (clothes, eating out, drinks–whatever is “fun” to you.)
Keep any item receipts, ATM receipts, or paycheck stubs in a drawer or on a spike until you process them.
Have a section on your Tracking Budget called “Credit Card.” When you process credit card purchases using the aforementioned receipts, subtract the amounts from the respective section of your budget and add them to the “Credit Card” section. This way, you’ll have the cash to pay that credit card bill off when it arrives. Then, each time you pay your credit card bill, simply subtract the amount you paid (ideally the full amount!) from the “Credit Card” section.
In the “Pay” section of your Tracking Budget, log your paychecks (if you’re depositing that money into your checking account.) In the Pay” section, you’ll also log any other income you receive throughout the month and deposit. Of course, write anything you deposit in your checking account into your checkbook register as well.
Use your checkbook register and your Tracking Budget to log what you pay for out of your bank account—be it by check or debit card. For example, paying your electric bill or buying things at a flea market.

Next time, I’ll go over what to do at the end of each month to process your receipts and prepare the money you earned in one month for use the next month. There will also be a video tutorial so you can see me using this system and get a real-world visual.

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MOOLAH MONDAYS: Getting Ahead of Yourself (in this case, it’s a good thing!)

November 6, 2014Budgeting & Moneybills, budget, checks, debt reduction, discipline, discretionary income, earning, expenditures, expenses, finances, loans, money, overspending, paycheck, receipts, saving, spending, stress reduction, trackingKurt Kirton

money, expenses, income — Photo by 3Peaker

Kind of a side-note blog post here…if you really want to take full advantage of this system, get 1 month ahead. In other words, everything you earn in November is your money for use in December. You may need to have a really lean month or two to accomplish this, but it is SO worth it. Here’s why:

Self loans – Let’s say you just found out that the leather jacket you’ve always wanted just went on sale big time. You won’t have finished saving for it until next month, but you don’t want to miss out on the $50 you can save now. Knowing you’ve got a little cushion since you’re using this handy dandy system, you go ahead and buy the jacket on your credit card (we’ll talk more about these later) at a great price today, logging the cost on your Tracking Budget. Then you can just “pay yourself back” (absolve that negative) next month. This cushion can also serve you well for unexpected circumstances (like that $800 of repair work you had to have on your car or getting laid off next week) if you don’t have a rainy day fund to cover such surprises. NOTE: Don’t abuse the cushion. This takes self control. You can do it. If you’re not so good at that, practice, practice!
Bills – Oh shoot, your cell phone bill is here! But, no problem. You already set aside that money and can pay it right away.
Bounced checks – …are over! I can’t remember bouncing a check since I was a freshman in college—and that was due to losing my checkbook. Since you’ve got a month’s worth of pay in your checking account at the beginning of the next month, you don’t need to sweat each expense, check your balance online every other day, or worry if your checkbook total is a little short of the actual balance.
Ready for block payments – Let’s say you’ve got a $500 car insurance payment due twice a year. Since you’ve been saving a monthly amount for this in your checking account, you’re ready to write the check (or even better yet, put it on your credit card, and get the points!) right away with no scraping up the dough in a mad panic!

In the next post, we’ll look at how to use the tools we discussed in the first post. If you live a month or more ahead, what’s your opinion of it? What benefits can you add to those above, or why would you recommend a friend do this?

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