Budgeting Question

[can'twait]

OK, we are starting the Total Money Makeover in January. This sounds like a crazy question, but I never thought about it before! As we started working on our budget, we had a question. I get paid twice a month - on the 15th and the last day of the month. If most bills are due by the first, that last paycheck will not be deposited in time to use in the current month. Should we actually use the $ we made the month before to budget with? Should we use the Dec. 31 paycheck and the Jan. 15th paycheck to pay January's bills? This way we are not using the calendar month, but going from the 15th through the 15th as a 30 day cycle instead. Does that make sense? Does anybody else do this?

Thanks for your input and advice.

 

[momx2]

That's what I did when we were on the program a few years ago. I get paid the same. It works great. I would use the Dec. 30th check and Jan. 15th to pay Jan. bills. Then use Jan. 30 check for Feb. Good luck!

 

[EthansMom]

For us, I use the second paycheck in Dec. and the first paycheck in Jan. for January's budget, the second paycheck in Jan. and the first paycheck in Feb. for February's budget, etc.

Also, every six months DH gets an extra paycheck. I budget the monthly budgets off just two paychecks and then budget the two extra paychecks each year toward vacations. We used to budget the two extra paychecks straight towards debt, but now we've paid down most of our debt, so use the money towards vacations.

I hope this helps! Good luck!

 

[pearlieq]

I think you're on the right track. DH gets paid on the 10th and 25th, so the Dec 25th check is used for Jan's early expenses and the Jan 10th check is used for end of Jan expenses.

 

[Chicago526]

I just want to say, you're lucky that your bills are due around the same time, ours are all over the map, and some change month to month for some weird reason...

 

[rflorek]

I just want to say, you're lucky that your bills are due around the same time, ours are all over the map, and some change month to month for some weird reason...

You can try to call the billing companies and have your billing date changed. My boyfirend took a job where he gets paid on the 15th & 30th. He called all of his utilities & credit card companies and had the billing dates changed to dates between the 15th & 20th so he could pay them with his 2nd paycheck.

 

[NicRI]

Does the system really work? Would you be willing to share your feed back, I would be interested in knowing it's working for someone...before I invest.

 

[LBAK]

I just ordered the book and I too am planning on starting it. For those who have done it was it hard and did it work?

 

[NicRI]

LBAK... I just found another thread with this topic... hope it helps you too.

http://www.disboards.com/showthread.php?t=985498&page=1&pp=15

 

[Toby'sFriend]

yes, it is very hard. It is very hard to look at something you really want in the store and have to say "No, I don't have enough cash to pay for that right now."
have to put it down and walk away. (as compared to pulling out a Visa, buying it and just not worrying about the cost) But yes, if you continuously spend less money than you make and save the rest and pay down your debt, it does work.

My suggestion -- my opinion of the biggest mistakes most people make is being really strict with their budgets in not allowing for any fun at all. Plan in a couple of meals out a month and give everybody in the family an allowance they can spend however they want. You don't want to make your lives totally miserable because then you won't stick with the plan.

 

[PlaneJoy1]

My suggestion -- my opinion of the biggest mistakes most people make is being really strict with their budgets in not allowing for any fun at all. Plan in a couple of meals out a month and give everybody in the family an allowance they can spend however they want. You don't want to make your lives totally miserable because then you won't stick with the plan.

We are planning a Disney vacation for March and are saving for it. Could that money go to lowering our debt? Absolutely, but in our opinion we have to have SOME fun with our children and we haven't had a family vacation in a couple of years. DH and I work opposite shifts with different days off, so time together has been scarce. This vacation will be paid for in cash before we leave - that's exciting for us.

Afterward, we will use the money that we were saving toward vacation to pay off debt. We will do this until we reach a set goal, and them plan another "reward" that will be paid for in cash.

We also use the envelope system and when the money in that category is gone.... you have to wait for it to be replinished (i.e. a paycheck) before buying. It has worked well for us to curb our spending habbits!