Learning how to organise your personal finances is one of the best things you can do. Talk about return on investment (ROI) in terms of your time and how this benefits you. Organising your personal finances is something that will pay back in dividends. Maybe not in the first year or two but it will happen.

Small money tree, plant growing out of money

In order to organise personal finances there is only one big question to answer:

Do you spend more than you earn or save a little bit each pay?

As the saying goes:

Spend more than you earn = unhappiness
Spending less than you earn = happiness or at a minimum peace of mind.

In terms of organising (or life) projects. Organising your personal finances is not the easiest thing to do, but it might be the most rewarding organising project long term.

I hope the start of this article has gotten you excited about organising your finances. This article has several parts to it. I’ll start with a personal story, move onto some amazing books that will help you organise personal finances and think differently. Then we look at some things to be aware of from an organising perspective. And lastly, I’ll introduce the best budgeting software I have ever come across. Something I have used for over a decade now.

Ready to get started let’s go….

A personal story

I am not a financial adviser but I am a budgeter! I always have been a budgeter, when I was young I used a maths book to keep track of my pocket money and the money I got from my job. When I grew older it became digital. When I am in charge of my finances I know how much I have, what the money is for, and what I am working towards (goals).

For some periods of time, I have been really strong with my finances. At other times, when I was under the influence of people with different financial ideas and dreams I wasn’t as strong. There have been times I have been in debt (welcome to single parenthood battling the court system). And times in my new life that my husband and I (when we were just together) that I have been irresponsible by not tracking our financial situation.

A reflection of what is happening

In my experience, your ability to organise your finances says a lot about how you feel about yourself and how things are in your relationship. If you cannot talk about and work through finances within your close relationship, something is wrong.

Irrespective if you are the financially responsible one in the relationship or not. If you have the right attitude, you can do many things:

· Learn as much as you can about finances.

· Start tracking your finances.

It is better to know how much you are in debt than not know and continue this for 10 years. If you end up being the only one that tracks expenses and your partner isn’t supportive then start a secret account. I am not advertising it but financial infidelity is a thing. And let’s say that my secret account was my lifeline to a new independent and free life.

All emotions aside, how do you organise your personal finances?

Here we start to get practical, clearly, there are hundreds of ways you can go about this what you need to know is what is coming in and what is coming out. Once you got this you can start looking through the detail and different methods. A way to learn different methods of organising your personal finances is by reading books.

Great books to read are:

The barefoot investor – Scott Pape books – simple straight forward advice by an expert

I love Canna Campbell’s books – not only does she tell you how to do your finances she teaches you how to invest in shares and create a financially secure future. She is all over YouTube so lots of wonderful advice there – if you are collapsed on the couch why not utilise social media to improve your life?

Rich Dad - Robert Kiyosaki, his books are older but still, hold lots of value. He is a teacher at heart and teaches you how to think about money. It has taken me more than 10 years since I bought his books and his games to really act on it, but the mindset he teaches is invaluable.

Another great resource is a financial counselor. In Australia, we have many organisations that offer financial counseling for free. Yes, you have to fill in a painful spreadsheet but this helps you get a clear picture. When I reached out to some financial councilors, people got back to me within a week. I compared and contrasted two councilors' advice, at that time I was nearly out of the debt cycle – I just didn’t see the light on the end of the tunnel yet – their advice confirmed I was on the right track.

**Ooh and then there is my book**

In “How to Organise Your Home and Paperwork” I also talk about the importance of budgeting.

Get the book

Organising your finances – great advice but beware

Lots of financial experts argue that you need to have several accounts to save etc. If I were to set up things from scratch and organise personal finances again, I wouldn’t go for more than 3 accounts.

Why? Simply, because of the level of overwhelm. Learning how to organising your finances is one of the hardest things you can do. The more accounts you have to track the harder it becomes. As a professional organiser I want to you make quick, easy strides and not overcomplicate organising your finances and your budget.

Forward momentum is more important than perfecting this is true for any organising project, you can always tweak and refine as you are moving along.

So how do you track your finances? – The Software

Welcome to the world of YNAB – You Need a Budget

There are many programs out there, which can help you with your budget. You can start paper-based, move to an excel document or look for online software. The latter option is obviously the easiest nowadays.

Now I am clearly stating I am biased here. I have been interested in budgeting, personal wealth etc. for decades and I love the budgeting program YNAB.

Note: I do not get reimbursed for recommending this program.

You might not have ever heard of the term YNAB before? It stands for: You Need a Budget and is by far the best budgeting software I have ever come across. My mission and passion in life is to do things very well, organised and if possible in the most efficient and effective way possible. I am one of those people who actually enjoys doing the budget. However, as an adult with a complex financial situation, I didn’t enjoy it before I used this software.

Looking forward with your budget rather than backwards

Normal software has you backtrack your spending make a budget based on last year’s income and expenses and then it will leave you. Meaning that the day after you have done your budget - it is out of date. This doesn’t help if you brace for an expensive December month or your washing machine dies.

A lot of the techniques assume the best way to budget is to look backward at your finances. It is not! Historical data gives you valuable information but it doesn’t define how you will spend your money today and tomorrow.

Using excel

A lot of software or suggestions rely on excel sheets. Excel is a great program for projections, sums and potentially a budget. Excel budgets assume that you have no issues at all with creating the formulas in a program and that it is “easy” to keep track of expenses.

It just doesn’t make the cut in terms of linking to your bank, being portable on your phone and creating ease of entry as life happens. How will you change your plan now your washing machine died?

Being human and having a life whilst you budget

All of this means that a week into your new budget, you are likely to be off track and that is if you still monitor your expenses. Not to mention excel or most other budgeting software doesn’t account for us blowing our budget on the occasion (and who doesn’t). Excel doesn’t account for human emotion or decisions which need to be made now for the future. All these things are not based on historical data.

YNAB

YNAB is different, it tells you to start as of today. Whether your finances are okay, good, or not so pretty. Your situation doesn’t really matter, because you will work with the money you have and give “every dollar a job". This is different but very similar to my organising spiel in which I state you need to give every item a home”.

YNAB has been around for a number of years, it is fully integrated to sync with your actual bank accounts. At least with most of the US banks at this stage. If you are overseas, like me - you can download your statements and import them directly into the software. This is still allowing you to reconcile your bank statement with what you entered on your phone. While, you were out and about - actually spending your money. To keep your budget in line. All you need is a set of habits and routines to keep your budget accurate – YNAB allows you to do this.

A real life budgetting example

Whilst I have a cup of coffee down the road, my habit when I leave is to update my budget. By the time I get home, the expense is already in my YNAB file, which was updated straight from my phone. Every week, I do a quick download from my bank account to sync and reconcile all the purchases during the week. This sounds complicated but once you have done it twice it is the same step over and over. My children have kept their YNAB budget from the age of 7 – including bank reconciliation (meaning you can do it ).

You know where your money is

One of the slogans from YNAB is that; “with YNAB it feels like you are giving yourself a raise”. Since using YNAB, I have had times when money was, plentiful and times it was tied. This tool allows me to know what I can and cannot spend on, as well as how I can change things if unexpected expenses do come up. It gives me a lot of freedom to utilize the money I have and change my spending based on my priorities and obligations at this point in time.

I could not even attempt to do justice on my website to this program and would strongly encourage you to have a look at their website. There is a vast number of Tutorials, written material, and free interactive online workshops. Workshops, which to this day, I still like doing occasionally - even after years of using their product (and no I don’t get an affiliate discount to say this).

The cost of organising finances

Ironically everything comes at a cost, whether this is time or actual money so it is with organising finances. Firstly, it will take a bit of time to set things up, to learn, and feel comfortable. If you decide to go with the YNAB. They normally have a free 30-day trial* after which, YNAB becomes a yearly online subscription. It is however very affordable. I make the money of their yearly fee back in a month, simply by keeping a tab on my expenses and giving some of my dollars the job of paying this subscription.

Watch this video on finances

Organising finances in summary

I find budgeting and organising are closely aligned. It reinforces the idea there are boundaries to anything we have and work with, which is the same as with organising. The magic happens, when you acknowledge this, work with it and create systems and routines to incorporate for example: organising, meal planning and financial management as regular practices.

If you haven’t started a budget yet start today.