I truly hope this week has been helpful to you. I admit it has challenged me to refocus on our financial goals and be disciplined every month with our budget. Dee and I have had good conversations about our debt and how to stay on track to pay it off! I just wanted to share a few more things that have been essential for us in not just having a good plan, but living it out.
1. Good Communication – If you are sharing income and bills with someone, it is so important to communicate often about finances. We have to make sure we have the same goals and values so we can walk the same path together. It’s always helpful to agree on who will be managing the budget. But regardless of who actually balances the budget on a regular basis, it’s important to touch base with the other person about where things stand.
2. Use online banking with automatic Billpay. Automatic Billpay has been so helpful to us. When a bill comes in, I just glance at the amount, make sure it matches our budget, and throw it away. (I’m not one of those anymore that keeps months of statements on file.) We schedule our bills to be paid right after payday so the pressure on our account is not on whether we can pay our mortgage or our utilities. The pressure is on us to be disciplined to keep our spending where it needs to be to meet our financial goals.
3. See if your utility companies have an equal payment option. Fluctuating utility bills can definitely be hard to deal with when you never know how much they are going to be. For the past 3 years or so, we have opted into an equal payment plan with our gas and electric companies. They evaluate the last 12 months of your bill and give you an amount to pay all year round regardless of your actual usage. At the end of the year, they either bill us the difference or give us a credit. They also adjust our payment amount from year to year if needed. If your utility companies don’t offer this service, just do it yourself. Figure out an average amount from looking at your last year’s bills. In the winter, when electric bills can be low and gas can be high, pay more than what is due on your electric bill. Then when summer comes and electric bills go back up, you have built up a credit in your account to pull from. You will owe less each month. Do the same with your gas bill, but on opposite seasons.
4. Match the timing of paying bills to the timing of your paychecks. If you get paid more than once a month, you will need to examine the due dates of your monthly bills to the dates of your paychecks. We have had seasons where we paid ahead and basically lived off last month’s income so things weren’t so tight. Either way you do it, just line up when the money is going out to when the money is coming in. You can always call companies about changing your due date if you need to.
5. Keep allocated money allocated for the right things. This used to be one of the biggest things that got us into trouble. We would receive money for business reimbursements or a friend or family member paying us back for something and instead of putting the money right back into our account, we would use it for other things. Working as a teacher and my husband being a teacher, another issue can be getting paid early. Since the school system closes down over the holidays, end of month paychecks usually get distributed early. You have to view this as next month’s money, not a Christmas bonus. That money has to be set aside for next month’s bills to get paid. This year, we got that paycheck early and I just transferred it over to savings like we didn’t have it. Then, around December 31st, I transferred it back into our checking account like a regular paycheck. It just takes discipline (and a plan for buying Christmas gifts.)
6. Have regular, small checks on the state of your finances. I try to take a quick look at everything every 1-2 weeks. I have our account open online, our budget spreadsheet open, and copies of any extra bills that may need to be paid. Then at the end of the month, I take a little longer to balance everything and make sure everything has been taken care of. Looking at bank statements once a month or checking your account balance online just isn’t enough to really stay on track.
Again, I hope you have benefited from something this week. I would love to hear from you. What has been helpful? What do you do or use that wasn’t mentioned? Please leave a comment and share what you do to stay on track. We can all learn so much from each other.
This is a part of a week long series on budgeting. Check out the other posts.
Budgeting Part 1 – Why Have a Budget?
Budgeting Part 2 – How to Set Up a Monthly Financial Budget
Budgeting Part 3 – What Do I Do With My Debt?
Budgeting Part 4 – Tracking Spending and Other Budget Resources