Are you happy with your money management and confident that your finances are on point for this year? If so, that’s awesome, you get a gold star
If not, hopefully our 10+ years of experimenting will save you some time. We’ve finally arrived at what we believe is the best way to simplify money management.
(This video provides a basic overview, and links and more information are below.)
How do clueless kids turn into responsible adults who manage money?
I think after almost 11 years of marriage I am finally starting to feel like an adult… most of the time. Not in the boring sense, but in the sense that I don’t usually feel like I’m pretending anymore.
My parents taught me how to balance my checkbook, but beyond that I can’t say I really knew much of anything about money management coming into adulthood. David certainly didn’t, either – he used to buy music CDs like they were going out of style (ahahaha, see what I did there?), or like they were actual Certificates of Deposit.
Praise Jesus (in my most southern accent, which is actually awful because I can’t do accents to save my life) that we got schooled in smart money management only 4 months after starting our young and clueless life together, bless our hearts. Divine intervention, for. sure.
In this case, it was common sense money management guru, Dave Ramsey, who lit a fire under our behinds and more importantly, in our hearts. Our eyes were opened, our horizons broadened, and we began to slowly implement a more intentional, goal-oriented mindset in place of the reactionary one we’d been operating out of previously.
In essence, we began to grow up.
A Comedy of Trial and Error in Money Management
I can’t help but chuckle at our foray into budgeting – so earnestly clueless.
We certainly had our fair share of lengthy “discussions” about how to sort things out, but once we found our groove it was gravy. 10+ years now of living debt free, and nearing 5 years of owning a mortgage-free home testifies that it is so, SO worth it.
Nothing motivates you to embrace a “restrictive” adult responsibility more than realizing it paradoxically creates more freedom than the instant gratification mindset your inner child didn’t want to give up.
Budgeting is one of those “adult” things that looks like a prison from the outside, but once you get into it, turns out to be the entrance to an awesome new world that you didn’t know existed.
Budgeting the right way creates a world where:
- You are on the same page as your spouse, working together towards the same goals.
- You don’t feel guilty for spending money.
- You “tell your money where to go instead of wondering where it went.” (hat tip to Dave Ramsey)
- You don’t have to constantly feel anxious about your financial situation.
- You are finally able to make progress and accomplish things you thought only rich people could do.
We started out using the cash envelope system, but quickly realized it was not for us and developed our own hybrid version. I created little tally sheets/ledgers that fit into an organizer purse similar to this, and we began using our debit card instead of cash, tallying each transaction on its appropriate category ledger.
To keep the story very short in comparison, there were other paper aspects of our budgeting process which we eventually moved into Excel, and then Budget Tracker.
With the evolution of technology, there are so many more options than when we started out, and our process has become so. much. easier.
Our Crazy-Simple Money Management Process
Full disclosure, we haven’t been as disciplined as we should have been with our finances in the last couple years. Our excuses ranged from major life transitions (David started working from home full time and also took over the finances) to variable income to trying out different systems.
After trying no less than 10 money management systems in as many years, we are pleased to have discovered a simple, synchronized, and headache-free variation that is incredibly easy to stick with.
Simplifying Money Management with the Right Tools
(FREE Budget Software that Just Works!)
One of the biggest keys to maintaining a simple household budget is using the right tools that make your budget work for you instead of making you feel like you’re a slave to it.
(The other key is understanding good budgeting practices, and this guide lays everything out nicely.)
We’ve been through our fair share of personal finance software trials, but have settled on Mvelopes for functionality and design (I can’t stand to use ugly programs!).
Admittedly, this did take us a minute to figure out how to set up, but an incredible amount of functionality is there waiting for you to find it!
If you don’t have business finances to worry about, this is the only tool you should need for excellent money management.
From mobile envelope budgeting to receipt management to reporting, forecasting, and more, Mvelopes does it all beautifully.
Tell your money where to go each month, track your spending quickly and easily, and see at a glance what you have left in each category. Then review your past habits so that you can learn and make better choices moving forward.
We’re using Mvelopes via a virtual cash account because our bank isn’t already linked, but if you do choose to link your bank account, your transactions will sync and all you have to do is drag and drop them into the correct categories. Sooooo easy!
Another app that you might like if you want the bare bones of a digital envelope system is SimpleBudget. It’s admittedly easier to get started quickly, but definitely less functionality and not as pretty to work with.
We needed something that had a lot of functionality to handle our business finances, from invoicing to robust reporting to payment features, and Wave handles all of it with ease. It even does payroll, though we don’t need that at this point.
Our personal finances are managed through Wave also, separated nicely within the same account. Tax season is no longer a big pain in the butt.
We used to use the Neat system for scanning and managing our receipts, and we still love it for going paperless in other aspects of our life (particularly in the area of our kids’ artwork – talk about overload), but we wanted to streamline things further.
Using Wave’s app on our phone helps us stay on top of all the receipts as we make purchases, as opposed to having a pile to scan at the end of the month. We can also forward any online or email receipts directly into Wave as well, so when it’s time to balance things everything is in one place, no scrambling around trying to figure out loose ends.
(I realize it might seem unnecessary to scan receipts when you’re using the envelope system, but I can’t count the number of times we’ve been glad to have them to look back on. It’s a must with business, and is easier to just do it across the board, especially in relation to taxes.)
So there you go, the right tools really do make it simple.
It’s basically set it and forget it! (I mean, you can’t really forget to use the tools if you want them to work for you, but, you know… that’s the “responsible adult” part of it If you missed the budgeting guide above, here it is again.)
Let us know if you’d like more in-depth information about how we make our budget work for us. There are a few more details in the video at the top of the post as well.