Ever since I read Dave Ramsey’s – Total Money Makeover and The Wealthy Barber I have been watching our finances consistently.
While Paying off Debt (we had over 60k debt) I did a monthly debt snowball, budget and Net Worth. All extra money went to paying off our debt(other then mortgage) and whenever we paid a debt off we would go out for lunch or something. I’m dutch and lunch is cheaper =) haha. After give or take 2 years we paid everything off. Now we live a debt free life.
These days I just do a monthly net worth spreadsheet and pay ourselves first. By moving money from our checking account weekly or bi weekly, you see a smaller balance and simply spend less. Our mortgage and property taxes come out bi weekly, which is when the wife gets paid. So the weeks my wife gets paid we keep $2000 plus our mortgage payment in account. All the remaining $$ gets allocated between a emergency fund, Resp and our tfsa. I get paid weekly so the following week if we have over $2000 in our account Friday night again I disperse everything to get us back to a balance of $2000. We have one credit card, whenever I see a balance I pay if off. Its the same for household bills I pay them right when I receive them.
I believe finances are truly easy once you start monitoring them. I feel the way we are doing it really can’t be any simpler. It is shocking how fast it adds up. The net worth spreadsheet is one of my favorite things to do monthly to see the gains. If you currently have any debt (besides mortgage) I recommend you focus on that before really investing. YOU CAN DO IT! we did. Like Dave says the borrower is truly slave to the lender.
Do you do anything different that I should be doing? Let me know below