If you’ve spent any time in the Budgeting section of my blog, you may be wondering how in the world someone like me could be qualified to dole out any financial advice. Well, technically I’m not… BUT, throughout all of the hardship we’ve been through, not once did I stop paying our bills or miss a monthly payment. It might have ended up being our downfall, but I bet I went into our bankruptcy with the best credit score they’ve ever seen.
I’ve seen all the magic “cash envelope” methods out there. And I’m sure they work for some people, but the majority of our money is spent online except for the basic groceries and Target/Walmart trips. That just seems like too much juggling. Plus, having cash in my wallet has NEVER proven to be a safe method of saving money.
By no means is this post offering up advice on how to make your way out of debt. Instead, I want to suggest a few different ideas that have made it easier to keep track of those monthly “non-negotiables” like mortgage, cars, utilities, etc. You know, the ones that roll around every month and you have very little say about how much they’re going to be.
#1 SET UP AUTOMATIC PAYMENTS
I’m constantly surprised at how many people manually pay their bills every month, whether it be online, or super old school style via check. There is no better way to forget a payment than having to actually remember to send it in.
#2 CHANGE THE DATES
Most places will let you chose the day your bill is withdrawn from your account. Take a good look at everything going through in a month, and try to space them out so that you’re not getting hit hard all at the same time. I’m not sure what took me so long to think of this. The first of every month used to be a killer for us. Then one day it dawned on me, make it so they’re not all taken out the first week of every month, duh!
#3 OPEN A NEW CHECKING AND SAVINGS ACCOUNT
This may sound counter-intuitive at first, but this has made a huge difference in helping us know exactly where we stand at any given time. We have one savings account that is actually our savings account. That’s the one we don’t touch (or try not to anyway). We have another account that the mortgage payment comes out of. I’ll put money in that account out of every paycheck, more or less depending on the time of month and what we have going on. But I always know that when the 15th rolls around there’s enough in there to cover they mortgage. Also, since that’s the largest payment each month, we’re not seeing that money in our regular checking account and feeling falsely rich.
#4 KEEP A CALENDAR
I’ve put every single monthly bill we have on my calendar in Outlook. You could also keep it in your phone, or write it on a wall/desk calendar. Every month though, I know exactly what I have coming out of my account and when. This helps us to know exactly how much we do or don’t have to spend when an REI sale comes up (which is apparently too often if you’ve been keeping up with our Expense Reports.)
#5 USE DIRECT DEPOSIT
This may be my favorite tip of them all. I have another account which is only for my car financing, no checks or debit card for it… I barely remember what bank it’s at. But each paycheck half of my car payment gets direct deposited into that account, and then of course the car payment it set up on auto-pay. With the money coming out of my paychecks, that car payment doesn’t even get factored into our income. You can’t spend what’s not there (well, we can argue the semantics of that another time).