Okay – let’s talk basics! Your budget should be based on what you bring home on a 4 week month! Add up all your expenses and your total income. Hopefully your income will equal or be greater than your expenses. If you income is greater than your expenses DO NOT BUY MORE – save or invest your extra each month for emergencies, vacations, retirement etc. If your income is less than your expenses you have two choices: Cut expenses or Create more income (Genius, hugh?) Cut costs by eating out less; buying store brands; shopping discount/consignment/thrift stores;cutting down data/txt/phone plans on your cell bill – maybe only use cell & lose the landline); take out the movie channels on your cable; rent movies instead of going to the theatre; if you can’t afford new clothes – don’t go shopping-you get the idea!
To help avoid forgetting to pay a bill – fix up a budget work sheet. Separate bills by when they are due each month and determine which paycheck they will have to be paid from. In excel (or a table in word, etc) make a template with 5 columns. Lable the columns: When due, Who owe, How much due, what check & a paid column. Then list under each column the bills in the order they are due and what check they need to be paid out of. As you pay a bill, mark paid in the paid column next to that bill. LIST EVERYTHING – from utilities, Credit cards, rent, food, savings, misc, even ‘fun’ money (of course if your budget looks like mine – ther’s not much left for that one) Then relax! When you get paid, pull out your worksheet and see what has to be paid – no more late bills or forgotten to be paid bills.
Concerning that ‘extra 5th week check’ – any extra have a designated spot for it. If you designate it for savings, college, vacation, paying off bills etc., then you will be less likely to’waste’ it. The goal is to become DEBT FREE and have less to worry about if you lose your job etc.
For great financial advise on becoming debt free check out the ‘Financial Peace University’ study series.