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I track all expenses in Quicken. Each time I get paid (twice per month), I "prespend" every dollar into a specific category "pool", such as utilities, debts, investments, charity, auto, and household.

Household expenses are paid with cash - we write a check, divide the proceeds into a special "coupon wallet" we've divided up (groceries, supplies, medicines, clothing, etc). All others are paid by check, or electronically if possible.

The amount that goes into each pool is determined by figuring the bimonthly portion of each expense we will have. For example, if our quarterly auto insurance bill is $300, $50 is set aside in the auto category each paycheck. When the bill arrives, I have $300 "pooled" to pay the bill.

Each pool carries over from pay period to pay period, so, for example, when utility bills are lower during spring and autumn months, a surplus is generated to pay the higher bills during summer and winter.

When a bill is paid, I write the check, record the transaction in Quicken, and deduct the amount of the bill from the balance in the pool.

Since we live below our means, we also have a special "surplus" pool. This is money for any special "off budget" purchases we might plan for during the pay period. Any balance remaining in the surplus pool is put into savings when the next paycheck arrives. (Note that we do budget a minimum savings amount each paycheck as well - this surplus amount is, well, surplus...).

Hope someone finds this useful.
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