I decided to go back to the basics and learn to live "paycheck to paycheck". Most of the time, that phrase is actually a bad thing. It is a sign of financial struggle. It denotes stress and worry. It give the mental image of eagerly waiting for each payday, while living a strained life the days in between. It suggests that there are no savings to be found.
That is not what I mean. I am not going back to the basics of financial struggle.
I am going back to the basics of budgeting. I am taking care to organize our monthly expenses. I am categorizing those expenses by which paycheck they will be paid. Every penny of every paycheck is being categorized, allocated, and tracked.
I like this system because it simplifies bill paying. There is a list of bills that are paid with the first paycheck of the month, and list of bills that are paid with the second paycheck of the month. With this system, I only need to sit down and pay bills twice a month.
I like simple. I like organized.
As I was mulling over this idea, and considering starting it with the January budget, my husband's employer announced that they were changing the pay schedule to twice a month. (It was previously biweekly). Since I had to restructure our budget to fit that new pay schedule anyway, it was a great fit to organize it by paycheck.
My past budgeting attempts set up a monthly budget, with random bill paying. It is easy to make errors with that lack of attention to detail. It is easy to overspend when tracking is just as random.
We are barely into this new month and new system, and I love it already. Bills are expected and logged as soon as they arrive. I am no longer surprised or stressed by the arrival of a bill. I know exactly which paycheck will cover the expense of each bill. I have been able to set up more automatic payments for regular bills such as the mortgage and utilities. I only sit down and write out checks for payments twice a month, on payday. I've organized the bill list in such a way that when I make the payments each payday, everything is paid on time. I no longer have to worry about remembering payment due dates, or if I have enough time to send a payment through the mail.
With the budget this simplified and organized, there is no stress from paycheck to paycheck.
That is not what I mean. I am not going back to the basics of financial struggle.
I am going back to the basics of budgeting. I am taking care to organize our monthly expenses. I am categorizing those expenses by which paycheck they will be paid. Every penny of every paycheck is being categorized, allocated, and tracked.
I like this system because it simplifies bill paying. There is a list of bills that are paid with the first paycheck of the month, and list of bills that are paid with the second paycheck of the month. With this system, I only need to sit down and pay bills twice a month.
I like simple. I like organized.
As I was mulling over this idea, and considering starting it with the January budget, my husband's employer announced that they were changing the pay schedule to twice a month. (It was previously biweekly). Since I had to restructure our budget to fit that new pay schedule anyway, it was a great fit to organize it by paycheck.
My past budgeting attempts set up a monthly budget, with random bill paying. It is easy to make errors with that lack of attention to detail. It is easy to overspend when tracking is just as random.
We are barely into this new month and new system, and I love it already. Bills are expected and logged as soon as they arrive. I am no longer surprised or stressed by the arrival of a bill. I know exactly which paycheck will cover the expense of each bill. I have been able to set up more automatic payments for regular bills such as the mortgage and utilities. I only sit down and write out checks for payments twice a month, on payday. I've organized the bill list in such a way that when I make the payments each payday, everything is paid on time. I no longer have to worry about remembering payment due dates, or if I have enough time to send a payment through the mail.
With the budget this simplified and organized, there is no stress from paycheck to paycheck.
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