I am thinking about borrowing a very interesting idea from the financial books I've been reading: paying this month's bills with last month's income. Anyone tried that? It sounds like a very fascinating way to pay the bills and let money sit tight for a bit.
Right now I am doing biweekly budgets which would make it so much easier to get it started than if I were to go monthly; just collect 2wks worth of pay and start paying this period’s bills with last period’s pay. I haven’t wrapped my head around the concept, but I think I’d like to try it, at the expense of 1.5mo delay in my payment schedule.
If it doesn't work or I don't like it, I can always just take paycheck's worth of income and do a bulk debt payment. Sounds like win-win, no?
This does bring me to a second topic: how do you pay your bills? Do you pay your bills monthly, biweekly, weekly, or as they come? Which one do you prefer or would prefer if you could make a change, and why?
I do the biweekly, and things are paid on the same Friday I get paid. I prefer that because I only have to "budget" and pay bills twice a month. It wasn't as easy, though. I had to change dates of some of my dues in order to make them fit into one payment or another. But it was so worth it. What's your side of the story?
Both my husband and I are paid on the 15th and end of the month so I pay bills twice a month. It works for us.
ReplyDeleteThat's neat your pay periods match!
DeleteI get paid twice a month, and typically have enough money in checking to cover the entire month's worth of expenses. On a particularly high spend month, I transfer money from savings to cover, and replace it when I get paid.
ReplyDeleteNice! That's what I'd like to try.
DeleteWe are on opposite pay schedules, so we pay bills just about every week (depending on when we get paid and the due dates). I pay the entire bill for the month...not just part and pay the rest later.
ReplyDeleteIn my perfect world, I would be a month ahead of the game. Everything would just get paid on the 1st of the month, end of story. That would require building up a sinking fund of a full months worth of expenses, and right now we just don't have the "extra" to be able to do that in order to get started.
If everything got paid at one time, it would save the time of having to mess with the bills all the time. And once you paid everything, then you clearly know how much you have to spend on variable expenses.
The start up does sound like a pain, but I think it may become worthwhile later on.
DeleteRight now I pay bills bi-weekly when we get paid. I have an excel spreadsheet set up so i know exactly which bills to pay with each pay check. Some of the bills, like day care, I set the money aside a month in advance. For example, the second paycheck in April, I set all the money aside that I needed to pay for day care in May.
ReplyDeleteI like that system. I keep it in a notebook I carry everywhere (why, I don't know!), and I really like it. I tried a spreadsheet, even though I use spreadsheets for everything else, and it just didn't feel the same.
DeleteWe pay everything at the beginning of the month... One swift swoop & it's done! ;)
ReplyDeleteI'd love to try that. Maybe I can arrange my bills just so...
DeleteI pay everything monthly (except for the big annual ones like insurance but for them I put an amount aside every month so it works out the same). I get paid on the last or second-last day of the month (or last Friday if the last day is on a weekend) and any bills that I can set the date of myself are set to be paid on the first of each month. There are a couple I have no control over though so electricity/gas come out mid-month, as does my pension top-up. I'd really prefer to pay everything all at once but that's the way it is. I'd also love to be a month ahead at all times but it's going to take me a long time to get there. It'd be nice to be one of those people who don't start checking their bank account first thing in the morning of the second-last day of the month to see if the money has come in yet, though.
ReplyDeleteI get what you're saying about checking the account first thing in the AM... I think I just do it obsessively sometimes.
DeleteI do bi weekly because we are on a fixed income and I get checks in the first week of the month and the third week of the month...
ReplyDeleteOurs are all over. The mortgage is the 6th, car payment, 12th, .everything it seems has a different date. My husband gets paid every 2 weeks, so I just pay what's due. Some things are auto, but I wish I could get and do the one month ahead. I have the YNAB program, and that's it's basis. But we never have enough to do that.
ReplyDeleteI do monthly because I get paid monthly. It sounds rough but it's so much easier to just pay EVERYTHING at the beginning of the month. Sometimes I feel like I should be paying something but it's already done b/c I do it only once a month. A few utility bills do trickle in later.
ReplyDeleteYNAB budgeting uses the idea of living on last months income, it's not a bad system to always have that buffer there. I get paid fortnightly and DH gets paid weekly.
ReplyDeleteEverything sits in our offset account and I pay the bills the day before they are due online.
Just dropped by. I think you have wiser strategy on budgeting, Tanner. Thinking about slicing your money for your monthly expenses can be tough. But if you’ll just focus with a smaller amount, it won't actually feel heavy on the pocket.
ReplyDeleteLynn @OnCoreBookKeeping.ca