Another choice is that you can let that money sit there and add up every pay period so that you can go on a true shopping spree! You will find that getting an oil change for your car is actually a pleasure because you have the money sitting there waiting to be used on your car instead of fretting how you can come up with $20 this month. Now the next time you go shopping, instead of feeling guilty for buying clothes that you don’t feel you can afford, you will feel immense freedom because you will have that amount of money that you set aside. Be sure that you have a fund for everything you and your family need. Hole punch those printouts and insert them into a Finance binder. If you have had trouble creating a budget or you have been using a credit card to pay for these expenses, then give this system a try However, if you trust yourself to let that money grow and to use it only for its intended purpose, then I suggest only treating your funds like they are in a separate checking account even though all of your money is actually together in one account. (See Figure 1 again) You could create a separate checking account for your funds alone. Then go back to your Checking Account Register and pay yourself back as a credit. When you need to pay for an expense that fits within one of the funds, show it as a regular debit or payment in your checking account register, but then go to the appropriate fund page and debit the amount there as well. Now you have money that will start to grow with each paycheck and will be ready when your family needs it. For example, you might be depositing $50 to the Medical Fund or $75 to the Gifts Fund. Then you will go to each fund page and write the amount you are saving for each category in the credit column (like making a deposit to each fund). After your next payday, you will deduct the total of your yearly expenses from your Checking Account Register (see Figure 1). For each yearly expense from your Yearly Expenses Worksheet, you now need to print a Fund page (see Financial Planning for more fund choices available to subscribers of ). Now that you have determined how much you will likely spend on each category of your family’s common yearly expenses, you are ready to create a safe place to start putting aside that money (on paper, not under your mattress). So, if you are paid bi-monthly, it should look something like this: Medical This will help you discover how much you need to add to those funds every pay period. The next step is to divide those yearly estimates by the number of pay periods in a year (12 if paid monthly, 24 if paid bi-monthly, 26 is paid every 2 weeks, 52 if paid once a week). Here is an example of some typical yearly expenses. You can estimate about how much you need in a year by revisiting the past year’s checking account register or your credit card statements to find out how much you spent in each category. Some other examples of Funds for yearly expenses are auto expenses, home, vacation, gifts, clothing, seasonal utilities, holidays, and big ticket items (TV, stereo, trampoline, etc).

In that case, a Medical Fund should be created. Maybe you commonly pay a co-pay at the Doctor’s office or frequently pay for a prescription. The first step is to analyze your family’s yearly expenses (not monthly bills) to determine what funds you might need to establish. The goal should be to accumulate money in designated “Funds” throughout the year in anticipation of the needs that invariably arise.

Another choice may be to take money from your savings, which is not recommended. Since this is not a regular bill, you may be tempted to put that $300 on a credit card and then end up paying interest until the lenses are paid off. For example, someone who wears contact lenses needs about $300 for a full year’s supply. Every month, there are the usual bills: rent/mortgage, utilities, etc, but there are many yearly expenses that crop up for which you may be unprepared.

Typical monthly expenses