Current finances snapshot + a recent budgeting win
In sync on finances and sweater color.
I've missed writing about our personal finances and today have a post sharing a snapshot of how we manage our finances right now. So let's get into it!
Getting back into our finances
One reason I haven't written about finances as much is because over the past few years I've taken less of an active role in managing our day-to-day finances. Chris and I have continued to have regular budget meetings and conversations about our finances but Chris has been the one to keep an eye on exact dollar amounts, what bills are due when, etc. And he's done a great job! So well that I knew our finances would still be in great shape as my attention was consumed with other things (oh like a pandemic and a baby and now a toddler).
But towards the end of last year I started to feel some stress about being disconnected from our finances. We've made some big changes in the past couple of years that have translated to additional monthly expenses, like childcare for Maeve and buying a new car last year. This means it's easier to spend up to our means if we aren't paying close attention rather than spending below our means which is what we prefer. I was starting to feel like our finances always felt tight even though it seemed like we were mostly buying the everyday stuff we need. It was a feeling I didn't like and so I decided to make a change. This year one of my goals is to get back into managing our everyday finances – and it's made all the difference in how I feel about our money!
When you work well with someone then anything you do together is better. That's how it's felt with our finances lately. Taking part in our everyday finances again has eliminated the stress I was feeling from being disconnected from them. Now I'm wishing I had never stepped away from being so involved but I'm thankful to be taking such an active role again.
How we keep track of our money: big picture
We had our annual financial summit over the holidays which included reviewing our monthly budget, setting savings goals, and talking about big expenses this year. Although we have conversations throughout the year about money, our annual financial summit is where we make the big decisions and talk through priorities so that we are on the same page to start a new financial year. To us, there's nothing more romantic than dreaming big alongside planning for everyday life and then making a concrete plan with a spreadsheet to make it all happen. Truly! It's probably our favorite date of the year.
Our two main tools to manage our finances are our budget (in a trusty Excel spreadsheet) and the budget website and app Mint. We've kept the same budget spreadsheet since we started managing our finances together in 2008. We keep the budget in a shared cloud folder so that we can both easily access it. For each new calendar year we make a new spreadsheet tab, copy and paste the previous year's budget, and make any adjustments, such as to reflect a raise, a new bill, etc. Looking at the budget tells us what should be possible with our money (i.e. how much we can save, what trips we can afford) if we stick to our budgets for our discretionary (non-necessary) spending.
I also love our spreadsheet budget because it represents decisions that we made once and don't have to make again. For example, we've decided that every month Chris and I each get $150 to spend how we choose. This could be getting take-out lunch or coffee, meeting up with friends, or buying something we want but don't need. (I tracked a year of my allowance spending in 2017 and wrote about it if you'd like to see what I bought!) Because we've already established our allowance budget we've eliminated potentially stressful monthly conversations about how much either of us are spending on ourselves. We both know we can spend up to $150 and we can easily track the spending in Mint.
The other budgeting tool we use is Mint, a website that can track all your transactions and gives you the ability to set categories of spending and budgets for those categories. We've found Mint to be a great tool but it does take time to customize the categories and budgets. So if you've tried Mint and don't love it or are going to try it, just know that it does take some time and effort to customize it before it really shines.
Where we keep our money
To manage our everyday money (not retirement or investment accounts) we keep a joint checking account as well as a joint savings account at Bank of America. We also have several joint savings accounts at Capital One. We started using Capital One a few years ago and love that you can easily create new no-fee savings accounts. We like this option because we've found having separate pots of savings very useful for things like our car insurance (which we only pay twice a year), our phone bill (which we pay annually), and Christmas. We have automatic monthly transfers set up from our joint checking account to these three savings accounts so they build throughout the year. We've also recently set up a savings account in Capital One for home maintenance and updates although at this point we don't have an automatic transfer going there.
How we keep track of our money: day-to-day
Starting on January 1 of this year, I dove back into helping to manage our day-to-day finances with gusto. I take great pleasure in customizing online tools to make them work exactly how I want them to and I have been applying this passion to Mint (adjusting categories and budgets). When something works really well it's much more enjoyable to use and that goes for financial tools as well. Now I'm back into the habit of looking at Mint everyday, categorizing any transactions that come through so that our spending shows up in the right budget category.
Budget tracking in Mint. For our allowances, we are carrying over unspent allowance for the previous month which is why we both have more than $150 to spend this month.
I love the budget snapshot that Mint gives so that we can quickly see how we're spending on groceries, personal allowances, and miscellaneous household things. Using Mint also makes it easy for Chris and me to touch base quickly on money matters. We can say, "Hey, it looks like we're getting close to our grocery budget for this month. Let's plan to make really good use of what we already have when we plan for dinners next week." Or, "Hey, what's this monthly recurring charge for $12? Do we need to be paying that?"
Besides categorizing spending and keeping track of budgets in Mint, we also have to keep an eye on the actual money in our checking account. We look at the current balance and then factor in upcoming bills and expenses before the next paycheck. This is the everyday financial management that Chris has always done and that I'm learning to do alongside him. We also pay for many things on our credit cards but pay off the balances every month so we have to factor that in as well.
Recent budgeting win
I'll end this post with a recent budgeting win that was made possible by tracking finances in Mint, and by talking to a friend about it. As I've gotten back into our finances I've been chatting with my cousin who is also a dear friend (hi, Em!). She shared that she and her husband realized they were both paying for iCloud storage but that actually you can share storage across anyone in your Apple Family. So they switched to sharing storage and now pay a little less each month. Hooray!
Her budget win inspired me to finally look into the cloud storage we were paying for...which turned out to be a lot! Per year we were paying $324 (!!!) for cloud storage across iCloud, Google, and Dropbox. Those expenses always felt intimidating because they seem like things we need but do we really? (I don't know!) And where is the cloud anyway? (I also don't know!) So I sat down and within about 10 minutes figured out that we were paying for much more storage than we need. That's often how these go isn't it?
Before I was paying for Dropbox, Google, and iCloud storage and Chris was paying for iCloud storage. We were able to simplify and now I pay for Google storage, eliminated a paid Dropbox account, and Chris and I are sharing iCloud storage. Now we are paying a total of $66 per year for storage instead of $324!! I'm annoyed at us for overbuying storage for the past few years but am so glad we took a closer look at that expense. I'd love to inspire some of you to look into any cloud storage you're paying for and see if you could be paying less.
I hope this is a helpful overview of how we manage our finances. I'd love to write more about our finances in the future so if you have a topic suggestion or question I'd love to hear it.
I'm curious how involved you are in managing your day-to-day finances and how you feel about it, and if you have a recent budgeting win I would love to hear that too!
And, if you liked this post, check out all of my previous posts on our personal finances.