Are you overwhelmed by budgeting or just don’t have the time? I know most everyone says you have to write out or at least adjust your budget each month, or you will never be financially successful, but I don’t think it’s really necessary unless your expenses are extremely unpredictable. When my husband and I got married, we didn’t pay close attention to our money. Even though we should have. We didn’t even write out a budget other than occasionally listing all our financial obligations every few months! But we always had money for paying bills and never missed or made a late payment. And you can, too!
To start with, your family must have an income; whether from a job or other sources. This, unfortunately, is unavoidable because it costs money to live whether we like it or not. Wouldn’t it be nice, though, if at least basic necessities were free? Next, you will want to make sure your income is at least equal to or preferably greater than your expenses. If not, you have two choices. Either, increase your income or decrease your expenses.
Now that you’ve made sure you’re living within your means, let’s learn how to budget without stressing about it and having to write it out each month. First, you will need to calculate how much money you need each month to pay all your monthly bills: mortgage payment/rent, utilities, water, trash, insurance, phone, entertainment, etc. Write that down and multiply by 12. Next, add up any other expected bills throughout the year, such as vehicle maintenance, irrigation, memberships, medical costs, HOA dues, etc. (When I figure up all our bills, I always round up to the nearest ten or hundred, so we have a bit of a cushion for completely unexpected bills) Add them all together and you now know how much money per year you will need to pay all your bills. Now divide the total by 12 or 24, depending on whether you want to put money in your bank account once a month or every two weeks. Personally, I prefer every two weeks. Now make sure you put that amount in your bank account consistently and you will never have to worry about not having money to pay your bills. The longer you do this the more extra money will accumulate in your account. Then when you do have an unexpected bill, you won’t have to worry because you will have the money to pay it.
Even if you have plenty of money saved, you can still forget and end up making late payments and have to pay extra, avoidable, fees. If you have trouble remembering to pay your bills, it’s time to form a new habit. From now on, every time you receive a bill, pay it immediately. Don’t wait till later! Remember you have money already saved for each bill. I pay mine every time I receive one in the mail or receive an email. And to make it easier for yourself, set up automatic withdrawal for every payment possible. That way you will have less to remember and do and more time for other important things.
You may have noticed above, that I didn’t include food, fuel, clothes, etc. So, after you put the money in the bank account for bills, the remaining money is for these categories or anything else you might want to spend it on. I recommend you either have two bank accounts, one for bills and one for other debit purchases, or use only cash for these purchases. If you choose to have two bank accounts, it makes it much easier to not accidentally spend money that you had saved for paying bills.
I hope this method is helpful for your family! I am so thankful that we have had money saved ahead of time for paying bills. It has been so helpful during times my husband hasn’t been able to work or when we have had unexpected expenses. I want to hear your budgeting tricks and tips, too. Please share them with me, in the comments below.