So glad to see you again!
In Budgeting Basics 101: The Basics, I gave you the jist about how to create your budget, and tips to stick to it.
Let’s zoom in and focus on one particular category: monthly bills.
Some of the basic money problems we tend to have:
- A group of bills are set around an inconvenient time of the month
- No organization for your bills (maybe automatic payments at the most)
- Fixed due dates on credit cards/bills
How can we fix/use the budgeting basics to help you with those problems?
- We’ll organize all your bills in a way you can visually see and easily track
- Set up a “bill” calendar you can easily reference and track/manage
- Give you some tricks on how you can change your bills due dates (yes, you read that right)
1. Create a “bill” calendar
I’m a fan of lists (as you can tell in my other budgeting post). I also like to look at what I NEED to take care of first. I mean, really, there’s no way to work around paying your rent and utility bills, so might as well face them head on, and get them out of the way and accounted for first.
When it comes to my bills, I make what I call a “bill” calendar. This is just writing/noting down all the days that you have a bill due. Don’t worry about amounts just yet.
Let’s look at an example:
- Rent: 1st of every month
- Bill 1:Every 3rd/month
- Bill 2: Every 8th
- Bill 3: Every 9th
- Bill 4: Every 10th
- Bill 5: Every 21st
- Bill 6 & 7: Every 23rd
- Bill 8: Every 23th
- Bill 9: Every 23th
You can keep a bill calendar any way that is most convenient for you:
- Written in a planner
- In your phone’s built-in calendar
- Using an app
Using the bill calendar is an easy way to organize your outgoing money, and to reference whenever you need to check if you have money to spare during an emergency, or when you want to splurge.
2. Your “income” calendar
This ones always fun to write down, because who doesn’t love to think about when we get money deposited right?
Not only that, but you will also get the other half of the picture, the flow out of your money.
So go ahead and add this to your calendar.
- Some of you may get paid once a month
- Some get paid every two weeks, wether it’s every 1st/15th or every other Friday
- Some lucky peeps get paid every week, whatever day that is
Filling this in should be pretty easy. And don’t forget to apply the over/under estimation tips from my previous budgeting post.
3. Add in the amounts
Now that your dates are all listed, write down wether money is leaving (-) or incoming (+), and how much (remember to underestimate a little bit).
- Looking at our example: I’ll write that every 3rd of the month, bill 1 will remove -$100 from my account. Every 15th; however, I’ll add $900 because I get paid.
Do this for all bills and paydays.
Once you get those down, start to look at your calendar and analyze how the flow out compares to your money in every week. Maybe on one week, more bills go out than money comes in, and that’s the tight week where you only get $10 to make it through the week.
4. Adjust as needed
So now you should get a really good picture of how much leaves and enters your account. Do you have any weeks where you’ll go negative? Do you have some leftover cushions every week just in case?
Let’s talk about moving bill due dates, since payday is kind of hard to change.
This is where I throw in my two cents: life hasn’t been the same since guys. Control feels awesome!
I set my own due dates when I need to, and here’s how you can too. There’s three ways you can do this (two if you’ve had your bills for awhile):
- Pay one month ahead
- Request a date change
- Use your “no-date set” period (if you just got the credit card)
Let’s go a little more into detail on what I mean.
Pay one month ahead
NOTE: For this option, you have to make an extra payment in the same month.
Let’s look at bill one from our example: Bill 1 is set for every 3rd of the month. The minimum is $25, and I would like to move it to the 16th instead, so I have some extra money at the beginning of the month.
On the 3rd of a month, I will pay the usual $25 so that my current due amount changes to $0. Then, I’ll set up an automatic payment to come out every 16th, on the same month (hence the double payment on the same month).
By paying ahead, you have removed the current due date. If you set up the automatic payment, you’ll be able to pay on the 16th instead every month automatically.
For this to work, you should always be “one month ahead”. If you don’t pay one month, you’ll automatic set the date back to what it originally was.
And voila! You’ve set your own date!
I like to do this with my smaller bills, because not only does it feel good to be ahead of the bill, but I can easily arrange them when I need to. Preferably spreading them out throughout the month.
Request a date change
Typically if you have a good standing and you’ve been making faithful payments for awhile, you can easily request and get your date to be changed. My husband did this with our car payment, because it was a large amount that came out too closely to other bills. He contacted the bank, and was able to set it to the one we wanted.
It was pretty easy, and sometimes if you already paid the bill for the month, they’ll let you change it on the next one.
Again, some banks might not allow you to change it, but I have yet to see a case where they didn’t (I have A LOT all my dates moved). I prefer this method for larger bills as well as my older ones. It definitely doesn’t involve dropping more money that I DON’T have.
Use your “no-date set” period (if you just got the credit card)
If you recently opened a new credit card, this will be perfect for you.
When you first use it, you get some cushion time before you get notification of when your new bill is due/set. I take advantage of this cushion time and pay my first month BEFORE I get the notification. Why? Because I get to do it whatever day I want. Then, I’ll set up the automatic payments, and the rest is history.
Another date set!
And that’s it! You’re on your way to a more organized way of managing your finances.
Stay tuned for more money managing tips, and don’t forget to check out the rest of the Adulthood section.