All About Budgets

How We Designed our Budget Step 5- 5S Organization

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Welcome to Step 5 in our budgeting mini-series where we talk about asking for receipts and the importance of this simple task for our budget.

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 all of your receipts because you didn’t ask for them all.

The last thing you want to happen is not being able to get organized with one of the most important tasks of your financial future so this step is extremely important.

Now this part of the budgeting process might sound a bit stringent but really 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.

So far in steps 1 to 4 in our budgeting series we’ve all learned;

  • How much income you Gross and Net on a monthly basis.
  • We gathered all the important documentation including pay stubs and banking info.
  • We know what bills to pay every month and when they are due. Two examples would be our credit card and mortgage payments.
  • We categorized the budget and assigned an amount to each “need” we have to pay for monthly.
  • We learned the importance of  Note Taking and Documentation

Explaining The 5S Principle

What does Organization mean to us?

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. In adopting this mindset we have been able to achieve greater goals, save time, effort and money.

Although 5s finds its home in manufacturing and is successfully implemented all over the world you can do this at home.

What is 5S?

The term 5S Kaizen refers to five Japanese words starting with the letter S which essentially 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 management of any budget you have to learn the art of organization. Let’s look at 5S a little deeper.

  1. I’ve learned over the years that keeping my space clean (Seiso) and free from clutter helps me save time. It ensures that I will get the job done leaving more time for the family and not my nose in the books.
  2. I sort (Seiri) through all the stuff I don’t need in my space and give it a home if necessary. ie: Last years bills. I typically will store my earlier years bills in a box for one year then discard them.
  3. I also learned that if I have a standardized process (Seiketsu) when budgeting in particular I’m assured that nothing will get missed. By organizing a procedure or chart if you wish you know exactly what needs to get paid and when.
  4. Everything on my desk is clearly labelled (Seiton) and arranged in such a way that I can quickly access the tools I need. Ex: I keep my pens and calculator to the left of my computer mouse. We keep all our bills in file folders ready to be documents in the Canadian Budget Binder Spreadsheet.
  5. This is called “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.I If you fail to make changes when needed you may resort back to your old way which may be harmful to your savings plan. You need to stay on course and find the easiest way to get to your goal. This is (Shitsuke).
  6. Safety is the 6th “S” but must be implemented in everything we do in our lives. Safety must be the front-runner as without safety nothing else would matter.

Organizing our Budget Binder- Receipts

Typically this is how we keep our receipts and bills organized with a 5S Checklist.
  • We immediately pull out the receipts and put them on the counter.
  • When we get a bill in the mail we open it, read it, circle the due date and cost.
  • We take both the receipts and bills and store them in a file folder with 2 pockets until we are ready to document.
  • One side is labelled (Enter) 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.
  • One of my CBB readers Carrie K says; One thing that won’t work for me in paper now are the bills in the organizing part. I get all my bills electronically. No more paper mess for me on everyday bills. So if you get your bills sent to you online this is a great organizational tip from Carrie! Keep them altogether in an on-line file folder.

We 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 and put them in a Ziploc, label the month and file it.

This makes it easier for us to find a bill for a certain month when needed. It also helps to find what month the bill was from with our monthly spreadsheet by locating the information we documented.

With that being said in this step I urge you to de-clutter your space, 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.
  • Checklist of items to make sure you do at certain times in the month so nothing gets missed. This helps to make sure you get no Non-Sufficient Fund (NSF) cheques returned or added interest on missed payments.
  • Set up your workspace, 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.

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  1. organization is sometimes my weak point|! loved the examples you give and learning about the 5S (and the sixth!) i can really learn a thing or to by having a place for everything and keeping my bills organized. i pay everything online but i tend to file all my bills together and hence they get lost. love how efficient this plan is. helps make life that much easier!

  2. Thanks for referring me to this article-I enjoyed reading about it. I already do most of these, but I had no idea it was japanese in principle.I think stillness should be the seventh “S”–once I have a system in place I am forever tweaking it.

    1. I’m always tweaking as well so I know what you mean. The important this is to recognize that we need to visit the budget often and make changes. Life never stays still and neither will our budget. Glad you liked the 5s Concept. Cheers Mr.CBB

  3. I am a “Quicken addict”. I know my finances to the “n’th degree”. When I get a bill, for my business, or personal, it goes on my desk. I have a little pile of stuff, that require action, or have been done, but I require resolution. They are not out of the pile unit resolved.

    For a bill, They are usually paid within a day or two, as I am on my computer, multiple times per day. When they are paid, they are filed, or shredded, as appropriate.

    I have an area for receipts “that i might need”. This is for anything that I buy, etc, that i might need to return, if it breaks within a month, etc.. This is really an unorganized mess on my shelf. About every 6 months, it gets huge & I go thru it & os the things that are no longer relevant.

    Not sure if this answers your question, but there it is…

    1. Yes it does, point being you have a system that works for you. You continue to work at your system and you know everything you need to do. This is what I am talking about in the post. Having an organized system that works. I need to get me a shredder though it would make life so much easier! Cheers Mate.

  4. Wow you are organized! I thought I was organized, it’s all relative, I guess.

    Interesting idea, the zip-lok

    1. We try to be organized as it’s frustrating when we waste time for nothing. A clean organized environment has proved to be more than sufficient in motivating us to continue doing what we do. Some people just give up when they have a mountain of “junk” surrounding them, then again some people thrive on it. We don’t. The Ziploc bag is ok I suppose, gets the job done. How do you organize your bills at the end of the month?

      Cheers Mate!

  5. Great idea! We’ve gone through 5S at work, but I’ve never thought of using it to apply to bill paying, organizing, etc.

    1. If 5s can make us work smarter and efficiently at work it should be just as applicable in our home life. Let me know how you make out with it. If you work in a 5S environment it should be a breeze for you.

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