Budgets are not like socks and toothbrushes where one size fits all. Salaries can be different as well with some jobs paying weekly, some biweekly, and some only once a month. Add to that the head-spinning planning of couples that each gets paid on different schedules. How can you possibly keep up and pay your bills on time, much less remember the rainy day savings? Take a deep breath, calm down and read on.
Round It Up
With a monthly paycheck, some things are on your side. You pay most big bills on a monthly basis anyway. House payments, car payments, utility bills, and many other commitments are on the same schedule as your income. The tricky part is you don’t know exactly how much some of those bills will be. Heating and cooling vary depending on the outside temperature. Grocery spending can fluctuate for many reasons such as holidays, birthdays, and other similar occasions. Get a specific notebook. Write down your expenses and round them up to your best guess. Add an extra $20 or more to each category to give yourself a cushion. What you don’t spend is money saved!
Some surprises are awesome but others can lead to overdrafts. Having your bills automatically withdrawn from your bank account can be a convenience, yet it can also cost you. Heating and cooling bills can come in as a real shock. Cable TV costs creep up with no notice or reason. If you have a large cash flow this may not be a problem. But if your budget is tight the last thing you need is a bundle of hefty overdraft fees as a result of allowing companies to basically withdraw what they want to from your account. Taking the time to write a check or pay online gives back your control over your bills and bank account.
Play By The Rules
The 50-20-30 rule is a simple technique that helps you manage your money. Start with what you actually bring home per month…minus taxes. Divide your budget into three parts. Then, budget 50% for necessities such as rent, food, utilities, gas, etc. Next, set aside 20% for savings, retirement, and the unexpected. The remaining 30% goes into a pot for everything else such as going out for dinner, a new pair of shoes, entertainment and wants. Fluctuations such as doctor visits, your pet swallowing a pill, (which he probably didn’t but you have to go to the vet anyway just to make sure) flat tires, and donations are just a few of the things that can come out of nowhere. Things happen but this rule can give you the structure to stay on a spending target.
When you make your budget, allow some breathing room but don’t stray too far off of a set in stone path. If you plan on spending $200 per week on groceries, spend $200! If you go ahead and plan for the small splurges, you can get that tub of ice cream occasionally with no financial guilt or setbacks. And please, don’t go to the store hungry! That is a sure-budget buster!
Planning is saving. There is no blanket budget or savings goal that fits everyone in every situation. But no matter how often you get paid, the same basic rules apply. You’ll find your groove and in doing so, always put some money into savings each month. Whether it’s a little or a lot, it all adds up. Many people do not have anything saved for emergencies and that is frightening! Thinking you will simply add it to a credit card will only cost you more due to heavy interest added on. If you are fortunate and blessed to avoid the negative unexpected, you will continue to build a nest egg and achieve great goals. Or, reward yourself with a vacation, pay off your car which will save a bundle of interest, or make some other dream a reality!
Summing It Up
These few basic categories, with practice, will become second nature. Determine your “bring home income”, calculate your expenses, stay on track with paying necessities first and set savings goals. When you do these essentials, you’ll stay on budget no matter how often your paycheck checks in.