So, this upcoming Tuesday night is our first meeting with our money coach we have snagged for free as semi-finalists for the Money Makeover. I am imagining like a Jillian Michaels/Biggest Loser/personality who is going to like spring up on me when I splurge as I like to on a pedicure or dinner out----YES, I love to save money, but I spend my share, too. My husband is lukewarm at best, probably fearing our crazy premium channels will soon be cut off. Yet, nonetheless, I am psyched! That whole Dave Ramsey, live like no one else now so you can live like no one else later sounds good to me! However, I have quite the library of personal finance books, and I have read them each at least once, so part of me is afraid I am going to coach the coach. We shall see. Therefore, before I make any big changes from some money coach, I am going to share with you what I am doing now---and it works!
1. Add up all of your outgoing bills for a month. I just put down my payments, not groceries and gas money, ect. yet. In my example below, imagine I pay out $2800 each month for mortgage, electric, water, cable, phones, student loans, car loan, credit cards and other bills/debt.
2. Divide the total amount of outgoing bills by the number of checks you will receive in the month. This is my target number to pay out each paycheck. In my example, $2800 divided by 4 paychecks equals $700 per paycheck.
3. I use an ordinary notebook and use a page for each month, I will try to post a picture after the text is posted (not the tech expert...) For example, right now, it looks like this because I have 4 paychecks in April:
April 2014
Check 1 Check 2 Check 3 Check 4
car 313 Bank of A. 268 Nelnet 165 Mortgage 582
mortgage 200 Geico 125 Sallie Mae 140 save 75
ect bills and more bills and more bills ect. bills
My Goal is to get as close to the target number you found in step 2 (in my example, that amount is $700)so that about an equal amount is paid out each paycheck. However, mortgage and other big bills might need to be split among two or more paychecks if they put you over the target number. My mortgage is $982, too much for my target number for one paycheck. I earmark the chunks for mortgage from the other checks in my savings account and transfer the money over to checking when it is time to pay the mortgage. If I am below the target number, I put the extra money in saving OR push a bit extra to my icky credit card bill, so each check leaves me with equal cash flow for gas and groceries, ect. Also, make sure you pay attention to bill due dates before you decide which paycheck you will write each bill under. I try to pay all bills due before the 15th of the month on the FIRST paycheck to avoid pesky late fees (not to mention, tarnish your credit score with late payments).
4. Each payday, grab your notebook, pay the bills assigned for the paycheck, and cross them off the list. Then, record the balance of your checking account after bills and estimate how much you will need for gas, groceries, and other neccessities. As you spend in between paychecks, mentally calculate what you have after each purchase---I actually keep a digital sticky note on my laptop for this. I also record the savings account balance and amounts earmarked for future bills so I know the true amount I have saved (for example, my checking account might look like I have $780, but if $200 is earmarked for mortgage payment upcoming I really only have $580 and I record that. It keeps me in "reality" with my bank accounts.
5. When next months' bills come, write down the amount of the balance to be paid in your notebook for easy reference to avoid paying interest. I usually keep the paper bills in the notebook for that month as well. This is done in minutes using online bill pay.
6. Enjoy knowing when your bills will be paid and paying them on time! Never miss a bill again!
Let me know if this works or if you will try it! And by the way, the title of this post is a joke because I am sure many of you have like crazy excel sheets or computer software....I use a notebook...hahaha...keeping it real old school.
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