When I have signed up for a credit card, car loan, Line of Credit, etc. in the past, all those glorious companies that take my hard-earned money each month, they automatically placed a due date as to when the monthly payment is due based on when you opened the account with them. This sometimes falls just days before pay day.
I take a monthly calendar which I purchased from the Dollar Store and I make sure it’s the size of a novel or a book so it can fit in my handbag and carry with me should I need to jot anything down. Another option is to use a free template in Word and make your own monthly calendar.
Now that you have your monthly calendar in front of you, plug in the due dates of all your fixed expenses (Mortgage/Rent, Car, Insurance, etc) and your variable expenses (cell phone, cable/internet, Electricity, etc.) for the month. If you haven’t received all your due dates yet, approximate when it will fall based on the previous month.
By laying it all out in a monthly format, I am able to better understand where all my expenses fall and out of which pay cheque they will come out of: whether they will come out of my pay from the 15th or the 30th/31st. I find this format works best for me as I like to see everything all at once, like glancing over a donut counter and seeing all your options before making a decision 🙂
This will also work if you have a weekly or a variation in your pay schedule to understand what is due when and if it works with your pay, mainly for your peace of mind.
From here, I add up all the bills that will come out of each pay. Are the numbers somewhat balanced or do you find that you have more expenses coming out of one paycheque (leaving you short every month around that time)?
What I noticed when I did this was that at the end of the first pay, I had a large cash-flow whereas after the second pay, I had nothing left, no buffer. This little experiment made me realize that my expenses were not equally withdrawn from each pay. I was paying more bills with one pay over the other.
This did not sit well with me. I tried to balance out my bills so that even amounts were coming out of both pay cheques each month and that I would have a consistent amount for savings. I like balance 🙂
I strategized as to which bills could be moved (if possible) and simply phoned the company and requested the specific date I needed the funds to be withdrawn from my account. That was it! Super Easy!
Most were able to do this relatively quickly and only able to move the due date by a couple of days before or after the current due date, while other companies needed one full cycle of payments to go through before I saw the change.
Don’t worry or be concerned if they won’t accommodate you because they will, they want their money and if moving a date will help you pay them, they will assist in your request.
Now my expenses are nearly equal with the same-ish positive cash flow left over after all my bills are paid which made for a more balanced savings routine.
I do this for every month mainly because I’m in a routine now and also your variable expenses will fluctuate up or down depending on usage (i.e. cell phone bill will be more one month over the previous month) so that will leave you with a difference in your excess cash flow each month.
There are other ways to keep track; excel spreadsheets is one example. Those are great, a few of my friends use this method, as you can create your own formulas and copy the whole process for each month on to different worksheets. But for me, I didn’t like having to log on to my computer to jot in the amounts, I needed to see it in front of me, able to make edits if I’m sitting in bed or on the couch or over my lunch hour at work (what? I can’t be the only one who does this?)
Now it’s your turn to share: what methods have you tried and/or prefer?