Author Topic: The "This Might Be A Stupid Question, But...." Thread  (Read 1059478 times)

0 Members and 1 Guest are viewing this topic.

camlan

  • Super Hero!
  • ****
  • Posts: 8640
Re: The "This Might Be A Stupid Question, But...." Thread
« Reply #6075 on: November 18, 2012, 09:20:44 AM »
Is it hard to budget when you only get paid once a month?

From personal experience, I don't think it is any harder to budget when you are paid once a month, as opposed to weekly or every other week.

What is harder is sticking to the budget, especially if you are used to getting a paycheck every week or two. During the transition stage, you tend to forget that there isn't another paycheck coming in a week.

My advice, which is worth what you are paying for it:

Gradually save up so that you have at least one month's take home pay in a savings account. This way, if you run short of funds at the end of the month, you can dip into your savings. First thing you do when you get paid is top off the savings. Slowly grow the amount in your emergency fund to three month's worth of take home pay.

Write down all your fixed costs--rent/mortage, insurance, car payment, student loans, utilities (usually you can work out an average cost per month), anything you pay every month. Add those up. That will show you how much money you have left for things like food and gas and fun things like new clothes and music and going to the movies.

Pay the fixed costs as soon as you get your paycheck every month. That way, you won't be scrambling to find money to pay the rent, or getting hit with late charges because you couldn't pay a bill on time.

Put money in your savings account after you pay the bills.

Then you know that what's left in the checking account is yours to spend as you please for the next 4 weeks. Do a little planning ahead--if you know you need to buy a friend a birthday present, or you want to go out with friends, mentally set aside that money.

I've been paid weekly, bi-weekly and monthly. I vastly prefer monthly, because I know how much money I have for the month and I don't have to wait for it. Getting paid weekly--I would want to pay a bill, but have to wait a week until a paycheck came in, which was a bit frustrating.

The one thing about monthly paychecks that I have noticed with some people is that they see something expensive they want and at the beginning of the month they have enough money to buy it, so they do. Leaving them with not enough money for food and gas at the end of the month. That's impulse spending, not a lack of budgeting. Once you have built up a safety cushion in savings, you can indulge in a tiny bit of impulse spending without running into trouble.
Nothing is impossible, the word itself says, “I’m possible!” –Audrey Hepburn


Mental Magpie

  • Super Hero!
  • ****
  • Posts: 5474
  • ...for the dark side looks back.
Re: The "This Might Be A Stupid Question, But...." Thread
« Reply #6076 on: November 18, 2012, 10:51:35 AM »
Thanks everyone!  I have always been paid biweekly, so I got a little intimidated when I got my first monthly pay check.  Unfortunately, not all of my bills are due at the beginning of the month (I get paid at the end); I'll make mental withdrawals for those so I know where I stand.
The problem with choosing the lesser of two evils is that you're still choosing evil.

Dindrane

  • Super Hero!
  • ****
  • Posts: 15401
Re: The "This Might Be A Stupid Question, But...." Thread
« Reply #6077 on: November 18, 2012, 11:11:58 AM »
Thanks everyone!  I have always been paid biweekly, so I got a little intimidated when I got my first monthly pay check.  Unfortunately, not all of my bills are due at the beginning of the month (I get paid at the end); I'll make mental withdrawals for those so I know where I stand.

One thing to note about bills is that most of them have a period of a week (or two or three) that you can pay them in without incurring late charges. There may be some bills you have to pay in the middle of the month no matter what, but if you have bills that you receive at the end of the month, you may be able to actually pay them at the beginning of the next month.

I do that whenever possible with paying my bills (and I also set up automatic payments for all of them so I wouldn't forget to pay them on time), because most of my money sits in an interest-bearing bank account that compounds interest on the last day of the month. I always try to have as much money as possible in my account on that day, to maximize the interest I accrue.

One other thing that I find helpful for budgeting is Mint.com. You can create budgets for your fixed expenses, and then based on what's left, determine how much you want to spend on other things. It lets you set up budgets for things that you don't pay for every month (like oil changes, or car insurance), and you can also set up budgets that roll over (so if you're under, you have more to spend the next month, but if you're over, you have less). It tracks your progress throughout the month so it's really easy to see how much money you have left for groceries or whatever.


CakeBeret

  • Hero Member
  • ***
  • Posts: 4261
Re: The "This Might Be A Stupid Question, But...." Thread
« Reply #6078 on: November 18, 2012, 11:15:21 AM »
Thanks everyone!  I have always been paid biweekly, so I got a little intimidated when I got my first monthly pay check.  Unfortunately, not all of my bills are due at the beginning of the month (I get paid at the end); I'll make mental withdrawals for those so I know where I stand.

Generally you can call and request that your bills' due dates be changed to a certain time of the month. Many companies are happy to do this. And, if you know the approximate amount of each bill, you can go ahead and pay it in advance. This works well for things like a cell phone or cable bill, when you already know how much your bill should be. Then if the bill comes and you underpaid it, you can go ahead and send the additional amount.

But I'm spoiled in the budgeting department; dh and I are both paid biweekly and on different weeks, so we get one paycheck every Friday. It's nice because I can budget each paycheck for groceries and gas for the week, and whatever bills are due at that time.
"From a procrastination standpoint, today has been wildly successful."

Mental Magpie

  • Super Hero!
  • ****
  • Posts: 5474
  • ...for the dark side looks back.
Re: The "This Might Be A Stupid Question, But...." Thread
« Reply #6079 on: November 18, 2012, 01:03:15 PM »
Thanks everyone!  I have always been paid biweekly, so I got a little intimidated when I got my first monthly pay check.  Unfortunately, not all of my bills are due at the beginning of the month (I get paid at the end); I'll make mental withdrawals for those so I know where I stand.

Generally you can call and request that your bills' due dates be changed to a certain time of the month. Many companies are happy to do this. And, if you know the approximate amount of each bill, you can go ahead and pay it in advance. This works well for things like a cell phone or cable bill, when you already know how much your bill should be. Then if the bill comes and you underpaid it, you can go ahead and send the additional amount.

But I'm spoiled in the budgeting department; dh and I are both paid biweekly and on different weeks, so we get one paycheck every Friday. It's nice because I can budget each paycheck for groceries and gas for the week, and whatever bills are due at that time.

I didn't know you can change them, that's pretty cool.  Mental Boyfriend gets paid at the beginning of each month, I get paid at the end, so we get one lump sum in about the same week...when we used to get paid both exactly at the same time biweekly.  It's a big change for us.
The problem with choosing the lesser of two evils is that you're still choosing evil.

Outdoor Girl

  • Super Hero!
  • ****
  • Posts: 14006
Re: The "This Might Be A Stupid Question, But...." Thread
« Reply #6080 on: November 18, 2012, 01:16:26 PM »
I don't know if this type of account is available in the States but I have an account that combines everything - savings, line of credit, mortgage.  As each paycheck goes in, the bottom line shifts and I don't pay interest on that amount of money for the amount of time it is there, until the bills start coming out.  I don't have to worry about money going in and out because it all floats on the line of credit.  It also pays really good interest when I'm in the black (which I haven't been since I rolled my mortgage in).

That said, I do set a budget each year.  I wait until the beginning of February when I've had two paychecks (paid biweekly) that are definitely from the new year with any increase I might be getting.  I look at all my bills from the year before, take the highest amount and round it up to the nearest $5.  Anything else, I calculate out what the expenses would be for the month.  I used to pay my mortgage weekly so I multiplied by 52 and divided by 12 to get a monthly amount.  I included my lottery addiction in 'fixed' expenses and anything else that was the same every month, even if it wasn't an automatic payment.  Then I subtracted the total from the total of two paychecks and that left me with the money I had to work with for variable expenses and additional savings (I included my retirement savings in the fixed expenses).  Because my budget is based on two paychecks a month, the third paycheck that happens twice a year is straight into savings.  Additionally, around July or August, my paycheck increases because a couple of regular deductions get maxed out for the year.  I pay my property taxes monthly by PAP and they don't take anything November and December which gives me that little bit of cushion to go over budget for Christmas shopping.

I don't work on cash - almost everything goes on credit cards and is then paid off each month.  That way, I get the rewards points and I also get a receipt.  At least each week, I gather up the receipts and write them down in a daily diary.  If I buy something that doesn't give me a receipt (like the snack bar at work), I try to remember to write that down right away.  The reward points from one of my cards goes a long way towards paying for my gardening addiction and I just went to California on the rewards points from the other card.  I don't panic if I go a bit over one month, especially if there has been an unusual large purchase that month, like when I bought new tires in April.  But I keep track of the overages and underages to make sure it mostly evens out for the year.

All my bills, except my credit card bills, are set up to be paid out automatically.  As soon as my credit card bills come in, I set them up to be paid.  With my internet banking, I can set them up to be paid in the future so I set them up to be paid 5 days before they are due (they recommend 5 business days but I go with 5 days flat).

Unfortunately, this approach only works if you have a bit of a cushion but something to think about if you have or can build a cushion.
I have CDO.  It is like OCD but with the letters in alphabetical order, as they should be.
Ontario

amandaelizabeth

  • Member
  • **
  • Posts: 796
    • Amanda's home based ece
Re: The "This Might Be A Stupid Question, But...." Thread
« Reply #6081 on: November 18, 2012, 01:38:18 PM »
We funded our cushion by budgeting for five weeks in every month for things like groceries.  Over a year we slowly accumulated the extra week's money until at the end of 12 months we had almost a whole month's income over.  It was all done in one account that was interest bearing and like the previous poster we pay everything by credit card which is paid in full every time.  By  using Internet banking we can set the variable bills each month and the rest are paid automatically.  We have enough reward points from using the credit card to get to,Hawaii next year - from New Zealand - and enough now in our savings to pay for things when we get there.  It is amazing how tough you can be on yourself when there a good rewards at the end.

Luci

  • Super Hero!
  • ****
  • Posts: 6038
Re: The "This Might Be A Stupid Question, But...." Thread
« Reply #6082 on: November 18, 2012, 01:50:33 PM »
Stupid question:

When you have your bills paid from your bank account, do you have to approve the payment?

I need to know how much the variable bills are so that I can keep track of my balance.

I need to view my bills to contest a wrong charge on a credit card or a misread electric meter, for instance. Or, as just happened, a surge in our cable bill that we weren't aware would happen and need to address. If I weren't paying them myself, all these things could happen and we would never know. I only pay 3 bills online, and those I have to initiate, so I have complete control.

I did have my Curves bill automaticly withdrawn, and at one time our insurance payment. That was easy enough to keep track of.

Ereine

  • Hero Member
  • ***
  • Posts: 1125
Re: The "This Might Be A Stupid Question, But...." Thread
« Reply #6083 on: November 18, 2012, 02:09:22 PM »
I have almost all of by regular bills paid automatically out of my bank account but I get a notification by letter or email a couple of weeks before the bill is due and so can check that everything is as it should be.

Dindrane

  • Super Hero!
  • ****
  • Posts: 15401
Re: The "This Might Be A Stupid Question, But...." Thread
« Reply #6084 on: November 18, 2012, 02:45:24 PM »
I don't have to approve individual payments from my bank account, because I approved them when I set up automatic payments. I do get a notification from every company I do that with for when the bill is ready so that I can view the online statement and see how much it is. The emails they send usually include the amount due, so it's pretty easy to identify if something weird has happened. I know how much it's supposed to be for the ones that are fixed, and I know what is reasonable for the ones that aren't.


Outdoor Girl

  • Super Hero!
  • ****
  • Posts: 14006
Re: The "This Might Be A Stupid Question, But...." Thread
« Reply #6085 on: November 18, 2012, 02:54:11 PM »
I have almost all of by regular bills paid automatically out of my bank account but I get a notification by letter or email a couple of weeks before the bill is due and so can check that everything is as it should be.

Works like this for me, too.  Like Dindrane, I don't approve each individual payment, I approved them to take the required amount out of my account each month.  So far so good - I haven't had any issues since I started doing this over 10 years ago.  (I'm touching a very large piece of wood right now.   :D)
I have CDO.  It is like OCD but with the letters in alphabetical order, as they should be.
Ontario

jpcher

  • Super Hero!
  • ****
  • Posts: 8681
Re: The "This Might Be A Stupid Question, But...." Thread
« Reply #6086 on: November 18, 2012, 05:37:16 PM »
Does running the air conditioner in your car use more gas? I was always told that this was true.

What about running the heater?

Soprych

  • Member
  • **
  • Posts: 135
Re: The "This Might Be A Stupid Question, But...." Thread
« Reply #6087 on: November 18, 2012, 05:57:29 PM »
I know that running flat land with no air conditioning we get 40 mpg.  When we are running flat land with air conditioning our mileage drops to 35 mpg.  If we are running regular Ozark hills we average 37 mpg.  Ozark hills with air conditioning as low are 30 mpg.


Our vehicle is an old Saturn with a manual transmission.  The original owner said when show room new he has getting over 45 mpg.

marcel

  • Hero Member
  • ***
  • Posts: 2018
Re: The "This Might Be A Stupid Question, But...." Thread
« Reply #6088 on: November 18, 2012, 06:10:14 PM »
Does running the air conditioner in your car use more gas? I was always told that this was true.

What about running the heater?
Everything that costs energy to use in your car, will make you use more gas.

Airconditioning
heater
radio
navigation system
telephone charger
lights,
etc.
Wherever you go..... There you are.

GreenHall

  • Member
  • **
  • Posts: 405
Re: The "This Might Be A Stupid Question, But...." Thread
« Reply #6089 on: November 18, 2012, 06:15:50 PM »
Does running the air conditioner in your car use more gas? I was always told that this was true.

What about running the heater?

To add a variable, I live in Florida.  I think I heard, somewhere, that the drag for riding with windows down uses more gas than just turning the a/c on. 
...I don't want to look it up, because I dont want to know it that's not actually true....