How We Designed Our Budget Step 5- 5S Organization
Estimated reading time: 6 minutes
Take your budgeting skills to the next level with the 5S organization philosophy. Streamline your finances and achieve financial freedom.
Budgeting Is Like Cleaning Where Everything Needs A Home
I believe that many people fail or give up on a budget because they lack the organizational skills needed to track where their money is going.
The frustrating part comes when bills are lost or can’t be found, or perhaps you aren’t documenting your receipts because you didn’t ask for them all.
The last thing you want to happen is to be unable to get organized with one of the most essential tasks of your financial future, so this step is crucial.
Now, this part of the budgeting process might sound a bit stringent, but take it for what it’s worth: think outside the box.
It’s merely a way to keep you on your toes, not a means to turn your home into a production line.
Budget Series Recap
So far, in steps 1 to 4 in our budgeting series, we’ve all learned the following;
- How much income is your Gross and Net every month?
- We gathered all the essential documentation, including pay stubs and banking info.
- Learned about what bills to pay every month and when they are due. Two examples would be our credit card and mortgage payments.
- Categorized the budget and assigned an amount to each “need” we must pay monthly.
- Learned the importance of Note Taking and Documentation
Explaining The 5S Principle
We firmly believe in “A place for everything and everything in its place.”
In Japan, they call this 5S in all aspects of the workplace.
We have achieved more significant goals by adopting this mindset and saving time, effort, and money.
Although 5s finds its home in manufacturing and is successfully implemented worldwide, you can do this at home.
What is 5S?
The term 5S Kaizen refers to five Japanese words starting with the letter S, which means “HouseKeeping.“
The term 5S Kaizen refers to five Japanese words starting with the letter S, which means “HouseKeeping.”
- Seiri-Sorting
- Seitori- Stabilizing and Straightening
- Seiso- Sweeping or shining
- Seiketsu- Standardizing
- Shitsuke- Sustainability
- Safety
Gains comes with 5S organization
To complete 5S budget management, you must learn the art of organization.
Let’s look at 5S a little deeper.
- I’ve learned over the years that keeping my space clean (Seiso) and free from clutter helps me save time. It ensures I finish the job, leaving more time for the family and not my nose in the books.
- I sort (Seiri) through everything I don’t need in my space and give it a home if necessary. I.e., Last year’s bills. I typically store my earlier years’ bills in a box for one year and then discard them.
- I also learned that if I have a standardized process (Seiketsu) when budgeting, I’m assured that nothing will get missed. Organizing a procedure or chart tells you exactly what needs to get paid and when.
- Everything on my desk is clearly labeled (Seiton) and arranged so that I can quickly access the tools I need. For example, I keep my pens and calculator to the left of my computer mouse. We keep all bills in file folders, ready to be documented in the Canadian Budget Binder Spreadsheet.
- This is “a place for everything and everything in its place.”If you find something is not working out for you, review your new way of budgeting and revise it if necessary. If you fail to make changes, you may resort to your old routine, harming your savings plan. You must stay on course and find the easiest way to reach your goal. This is (Shitsuke).
- Safety is the 6th “S,” but must be implemented in everything we do. Safety must be the front-runner, as, without safety, nothing else would matter.
Organizing our Budget Binder- Receipts
Typically, we keep our receipts and bills organized with a 5S Checklist.
- We immediately pulled out the receipts and put them on the counter.
- When we get a bill in the mail, we open it, read it, and circle the due date and cost.
- We store the receipts and bills in a file folder with two pockets until we are ready to document.
- One side is labeled (Enter) and the other (Entered/Paid).
- When we enter the data from the receipt to the Canadian Budget Binder Spreadsheet, it gets moved to the (Entered/Paid) part of the folder.
- This way, we know it’s been documented.
- When we pay a bill, the same process applies.
- We also mark the date the bill was paid on the bill and how much was paid.
- A CBB reader says; One thing that won’t work for me with paper are the bills in the organizing part. I get all my bills electronically with no more paper mess.
- So, if you get your bills sent online, this is a great organizational tip from Carrie! Keep them all together in an online file folder.
End Of Month Process
We will continue this process until the end of the month.
Once the end of the month has come and gone, we take all the bills and receipts, put them in a Ziploc, label the month, and file them.
This makes finding a bill for a particular month easier when needed.
It also helps to find what month the bill was from with our monthly spreadsheet by locating the information we documented.
Tidy Your Space
In this step, I urge you to de-clutter your space and get it cleaned up and organized. Design a chart outlining a process that suits your needs;
- Name of all bills, credit card numbers, and when they are due typically each month.
- Make a checklist of items to ensure you do at certain times in the month so nothing gets missed. This helps ensure you get no Non-Sufficient Fund (NSF) cheques returned or added interest on missed payments.
- Set up your workspace and have all tools readily available to you.
Next up in our mini budgeting series, Step 6, we explain the concept behind, “Who does what and when”.
Working together to save money for our financial future makes sense when we are both on the same page.
Discussion: How do you keep your budget binder organized?
Leave me a comment below and I’ll respond.
Related Posts
- How we designed our Budget Step 1 Gathering All The Information
- How we designed our Budget Step 2 Categories
- How we designed our Budget Step 3 Tracking Receipts
- How we designed our Budget Step 4 Note-Taking
- How we designed our Budget Step 6 Who Does What And When?
