Is anyone in charge of your finances?

I grew up without many resources

I’m not a financial professional at all. My experience comes mostly from living without much. I’ve done pretty well with very little for many years though. Most of my life actually. 

I grew up with a one parent household, and a very frugal parent. For a little while I was single and had an income of my own. It wasn’t a huge income, but I did work myself into a professional level. Being single I wasn’t completely broke all of the time. I could pretty much buy what I felt like when I felt like it. I hadn’t quite mastered keeping trach of my bank account though, so there was a learning curve, but I kept up with all the major stuff like food, and shelter without any real problems.

My family did not have a whole lot of money, they just used what they had reasonably well. My father served as an excellent example of frugalness and getting by on very little. When my mom passed we had one advantage, really (maybe two).  The biggest was that before I was born my parents had put away enough money to purchase the property they built on in cash. Then they built it with cash. That meant when the unthinkable actually happened, and my mom passed my dad did not also still have a mortgage to pay. I could be wrong, but I suspect that was a huge burden to not worry about.

Practice makes perfect

Getting married and having to rely on my husband’s income for our whole household was a huge learning experience for both my husband and I. I mean, we not only suddenly had to navigate “joint finances,” we also has a tiny baby relying on us to get it right.

I can tell you that my first instinct was about as wrong for us as it could have been. I thought because he went out of the house to earn it he should be in charge of our finances… That’s right, I called his paycheck our finances. Because that’s what our whole family lived on. I still lean toward “letting” him run most of his paycheck most of the time. It’s become clear over the years though that I am better at making sure our money goes where it needs to.

One income home- My job is caring for the household

It took years for that mistake to show up as a mistake. You can imagine when something builds as a problem for years, it becomes a huge problem. He is far better with money than many of his peers, and family. I have to give him that. That is why it took years for me to see it. He is also really, quite good at earning it, and doesn’t sit still, which is why having him work outside of the home works so well for us. Like many qualities our skills complement each other very well.

Who is in charge of your finances?!

That brings me to a key concept in running finances. I discovered it one of the many times I was looking for a system to keep track of where our money went. You should be in charge of your money, not just letting it slip through your fingers without knowing where it goes.

In order to be in charge of your money you need to keep track of it. Even if you know you are broke, and have no control over it for now, you still need to face that dragon, or you can not change the situation. That’s the one concept my husband has never been able to learn. He understands it I think, but he will not sit down, and just write in a checkbook.

How to track your money?

There are actually a few ways to do this. My favorites are using envelopes, and writing in a checkbook. There are actually digital methods as well, but for this purpose those are not my forte. I generally just write in a register what comes in and out of our account. When things were really tight, or we had found ourselves behind, and I had to dig us out I would use the envelope method.

A checkbook is pretty straight forward, but I’ll explain the envelope method a bit. It uses cash rather than a checking account for one thing. You use a collection of envelopes for various bills, like groceries, electricity, phone, gas and/ or savings. Yes, savings. Even if it’s just $5 or $10 dollars. Unless you are starving you can likely do this. It goes in that envelope first. If things are tight that money might get you to work, or buy food if everything goes wrong, or it might add up to something bigger.

Knowledge = power to make it happen

The money you put in the savings envelope (or specific bank account) is the thing that makes the biggest impact and puts you in charge of your own financial situation. I once used it to rent a Uhaul to move when we only had a regular sized car, and needed to move quickly. I’ve used it to pay bills that we got behind on. More recently I’ve used it for extras on vacations. Any projects I happen to be working on. Maybe I shouldn’t add this part, but this is why my family thinks I can magically make money appear… I’m not actually magic. I’m willing and able to keep track of our money, put most of it toward our necessary bills first and put most of the rest aside for a rainy day, or some of my bigger ideas to improve our life. (I always have plenty of those)

The thing that makes it look like I make magic, also makes me look really frugal, even downright cheap. That’s because I make decisions that lean toward the big things I want. For example I bring coffee with me when I leave the house early. I’d rather save enough money for something out of the ordinary on a vacation (or even have a vacation at all) than spend that much more on someone else making my coffee. For you maybe your thing that you want to work toward having is coffee out every day. If you have the money for it do that.

Whether you decide to pay attention or not you are making a decision about your finances

First though, make sure you are making decisions about where your money goes. Food, shelter, necessary utilities like electricity, and phone are generally at the top of the list. Transportation is usually pretty high on it.  Once basic needs are done, it’s the person in charge of your money’s choice. Whether you are taking charge of it or not you are making decisions about your financial situation. If you don’t pay attention to finances they tend to disappear. By not deciding where to put it you are deciding.

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