Everyone has a different method for paying bills and keeping track of spending. For a long time, I struggled to find the right method for me. I used to track spending with my online banking system, but that didn’t allow me to create a budget. I was constantly looking at my balance and mentally subtracting bills that I knew were coming up. It was stressful and dangerous.

Then I started paying my bills on payday. This helped me avoid the constant fear that I wouldn’t have enough to pay my bills when they were due, but it often left me with a dangerously low balance at the end of the pay cycle.

Now that I’ve been budgeting consistently for about 6 months, I’ve developed a method for bill paying and financial organization that works really well for me. So I thought I’d share it with all of you.

My checking account is for bills and living expenses only. I keep enough to pay my monthly bills with a little cushion for human error, but the rest of my money goes into savings where it can earn interest and stay safe from impulse purchases. When there’s extra money in my checking account, it gives me a false sense of wealth. When I have just enough to cover my bills, I’m not tempted to spend.

Every month on the 1st of the month, I create a zero-based budget using Mint.com. Every penny of income for the month is assigned to a purpose. By this time, I’ve usually already received the bills that fluctuate from month to month — like the electric bill and gas bill. I set all of our fixed expenses first, then I balance our discretionary spending amounts for food, entertainment, and savings based on what’s left over.

I’m able to determine how much I can afford to put into savings, and go ahead and put it away before we pay any other bills. I’ve tried to wait until the end of the month to contribute leftover money to savings. The problem is, there’s almost always nothing left by the end of the month. If it’s in my account, I’ll spend it. It’s easier for me to determine how much I can save, and save it right away to eliminate temptation.

Because I don’t keep a huge surplus in our checking account, I stagger bill payments with pay periods. Tony receives his teaching stipend at the end of every month, but pretty much all of it goes to rent and savings on the 1st of the month.

I’m paid bi-weekly, so I base our bill pay schedule on my paydays. The bills that are due in the first half of the month are paid on the 1st. Bills due in the second half of the month are paid on my second payday. I use Mint to keep track of what’s been paid.

Every other day or so, I check our spending in Mint. I try to make sure we’re on track to avoid overspending. We have very few discretionary spending categories, which makes it easier. I really only monitor food, miscellaneous expenses, and entertainment.

Pairing zero-based budgeting with electonic spending tracking and a consistent bill pay schedule allows me to stay on top of spending. It also lowers my stress. Because my budget is zero-based, I know I’ll always have enough to cover my bills and expenses. That works for me.