Round It Up
If you only get paid once a month there are actually some benefits to you! We'd be willing to bet that you pay most of your bills once a month. House payments, car payments, utility bills and many other commitments are on the same schedule as your income. The tricky part is that 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 to track your bills. 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. This number will be your required expenses each month.
Certain types of surprises are awesome but others can lead to overdraft fees. Having your bills automatically withdrawn from your bank account can be a convenience, yet it can also cost you.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 if you aren't prepared. Even 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. If your overdraft fees add up, consider removing automatic payments from our account. The key being, you will have to pay extra attention to all of your due dates.
Play by the Rules
The 50-20-30 rule
is a simple technique that can help you manage your money. Start with what you actually bring home per month, the true amount of your check after taxes. Divide your expenses into three parts, necessities, savings and everything else. Then, budget 50% of your earnings for necessities such as rent, food, utilities, gas etc. Next, set aside 20% for savings, retirement and the unexpected surprise. The remaining 30% goes into a pot for everything else such as going out for dinner, a new pair of shoes, entertainment and other desires. Fluctuations such as doctor visits, your pet swallowing a pill, flat tires and donations are just a few of the things that can come up 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 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 surely a budget buster!
Always Save Something!
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 rates. 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 comes in.