Chelsey and I recently received a letter from her brother, who is rector of a seminary in Germany. It's always nice to hear from Fr. Dana. Along with the usual updates of daily events, there is always a little nugget of wisdom to be gleaned from his correspondence. He was discussing the challenges associated with managing the seminary and noted that he had developed a real appreciation for the Latin phrase Serva ordinem, et ordo servabit te, or "Serve order and order will serve you." Our family finances would benefit greatly by following this same principle.

In part one of this article, I focused on two of the building blocks that will help you manage your family finances: a proactive attitude and an orderly file system. I'd like to continue with comments about checkbook management, tools of financial planning, and the importance of a consistent schedule.

Checkbook Management
If my counseling experiences reflect what most families are dealing with (and I think they do), keeping the family checkbook current and accurate seems to be about as rare as a Michaelangelo sculpture.

Can you relate to the following scenario? When you're at the checkout counter of the grocery store with your children, one of them a baby wiggling in your arms, how often do you just give up on entering the information in the check register? It's so easy to say you'll get to it when you return home. Then when you get home you have to put the groceries away. By the time you get around to updating the check register, you can't remember if it was for $97.49 or $79.94. For the person who handles the checkbook responsibilities, the frustration level rises as he or she attempts to reconstruct what happened. It can be expensive as well. I've counseled families who have incurred up to $70 in one month for bank charges related to insufficient funds in the account. One of the greatest inventions in the last few years that can go a long way toward eliminating this friction between husband and wife are carbon copy checks. When you write the check at the store, a copy remains in your checkbook that can be used to update your register later. I highly recommend them.

A second key component of checkbook management is the monthly reconciliation of your check register to the statement provided by the bank.

It's fairly common in my counseling to see checking accounts that have never been reconciled. Without reconciling your check register to your bank statement, you never know if you made a mistake in the register or if the bank made an error (these do occur). Your register may show $100, but if you haven't reconciled the account, you may have made errors accumulating $200, so that you are actually overdrawn. By reconciling each month you make sure you and the bank are in agreement.

The back side of your bank statement should have a format you can use to reconcile your account. Complete this task faithfully every month down to the last cent!

Financial Planning
This last year, our pastor sent out as a Christmas gift to all families in the parish a wonderful little book, The Christian Home, written by Rev. Celestine Strub, O.F.M., in 1934. The author writes about the importance of families keeping a budget in the following way: "The best way for parents to avoid excessive or ill-advised expenditures is to keep a family budget. Let them make a careful study of their resources and a classified list of their needs. Then let them fix a certain percentage of their income for each of these items of expense, and hold their disbursements strictly within the budget allowance, unless real necessity or charity requires otherwise. Keeping a home and a family is just as much a business as running a store; so why should it not be kept on a business basis? Many couples have had their eyes opened by keeping an itemized account of disbursements. They found that they had been extravagant without realizing it. But if keeping tab on one's expenses teaches economy, it should be done in every Christian home; for economy, supernaturalized, is nothing but the Christian virtue of moderation."

If keeping a home was just as much a business as running a store in 1934, if anything, it is certainly more so now with such complexities as variable rate home loans, automatic teller machines, credit cards, and a complicated tax system.

Financial planning starts with understanding your current situation. What are your assets and liabilities? Are you dealing with significant consumer debt issues? Is your monthly spending in line with your income, or does the money run out every month? If you do run out of money every month, where is it all going? To answer these questions, you need a financial planning system that will help you organize your information in a format you can understand. If you would like copies of the forms I use in my counseling, along with instructions on their use, just write to Financial Foundations for the Family and we will be happy to send them to you. We do ask that you send $2 to cover our costs.

A Consistent Schedule
Our counseling program involves meeting with a family once a month for six months. As we sit down to discuss how they are progressing, it is fairly common to discover they were up late the night before updating their budget. Rather than having the financial planning process be a fire drill each month, I encourage them to follow a more consistent schedule. I recommend that bills be paid weekly as they come due and that the check register and tracking of expenses be completed at this same time. Initially, I recommend that you update your balance sheet, summary of debts and budget worksheet monthly. Once your plan is established, you may choose to update these quarterly if you prefer.

Implementing all of these steps takes effort and discipline, but given the state of family finances in our country, can you afford not to get started now? If we can help you along in your efforts, just write us. God love you!