My wife and I have worked to get our financial house in order. We have become devout followers of Suze Orman. We have made a rough budget. We have our first emergency fund. We are nearly credit card debt free. We are working to save up an 8 month emergency fund so we can stay that way. We are paying off student loans. We are looking to the future and home ownership. Paying overdraft fees and having to stop spending because we ran out of money before payday is a thing of the past.

We have made a lot of big steps this year. We didn’t want to be a family that was making good money and still living paycheck-to-paycheck. It is an easy trap to fall into and we have been there.

We knew things had to change when we were both working full-time and still barely had money for our bills and expenses. We weren’t going into debt but we weren’t getting out of it either.

Our path to financial health has been slow and steady. There are no quick fixes. We made some good decisions and stuck to them.

First, we did what I think was the smartest step we could take. We created a shared bills calendar. I made a new Google Calendar, called it Bills and shared it with my wife. I added my pay days, a strange 7th and 22nd of every month, and she added her more normal 1st and 15th. Now we knew when our money was coming in.

Next, we added all of our recurring monthly bills. Student loan payments, Netflix, web hosting, Audible, cell phone and Internet were all laid out in front of us. Now we knew when that $300 would be heading to students loans or when FiOS would take its $54. There is something wonderful about seeing all of your money laid out in a calendar.

Now that we knew when and how much of our money was coming and going, we changed some payment dates to better cope with rent. After that, we made a rough budget. How much gas do we buy? What about groceries? Do we want to put away savings for medical bills and vacations? We assigned values based on the previous month’s spending and continue to tweak it. Now that we know where our money is going, how do we start saving?

We are fortunate to bank with PNC Bank and use their Virtual Wallet software. The Virtual Wallet allows us to break our savings into three accounts. From there we can set savings goals and ear mark amounts towards each of those goals.

For instance, we have categories for medical bills, new car tires, vacation and a new sofa. We put a lump sum into savings every pay check. Then my wife goes into the virtual wallet and applies $50 to one category $30 to another and so on until all the money is accounted for.1

I like this much more than having one big sum of savings money. The money already being put towards something means it will not get spent on frivolous things.

Through a simple bills calendar, using our bank’s web-based software and making a simple budget we are digging out of debt. We know where all of our money goes every month. We are in control of our money instead of letting it control us.

  1. I erroneously thought the Virtual Wallet was applying the money to different categories. It does not, so I’ve revised this sentence.