The dreaded "B" word

Ever wonder why you may always feel broke even though you are up to date on your bills? Well there can be many reasons but one way to get a clear picture on your spending is to have a budget. Now I know what you are probably thinking that having a budget will hamper your lifestyle and limit your spending but in many cases it is the opposite. I have known many people who pay bills as soon as they come in and always feel broke, or do a monthly budget even though they get paid biweekly but end up trying to pay all bills at the start of the month. I had a job where I was paid on the 1^st and 15^th, I decided I needed a new way to budget. Especially depending on when the 15^th of the month fell it could be 2 ½ weeks before I saw another paycheck. So what I did then and still do now is I looked at all of my bills due dates and wrote them down. Then I looked at my pay dates and planned what bills will be paid by each paycheck.

Pay Check	Mortgage/Rent Due 1st	Water Due 15th	Gas Due 18th	Electricity Due 25th	Cell Phone Due 30th	Food
3/12  $2000		$30	$80	$120	$80	$200
3/26  $2000	$1200					$200
4/09  $2000		$30	$80	$120	$80	$200

From the chart above you can see that I have based bills on two paychecks a month which means hint, hint: you have two free paychecks a year on those months we get paid three times. On those paychecks the only thing that should come out is maybe gas for your car and food.

Not only will this give you a better picture of what you are spending, it can also increase your credit score. If you notice the chart, I am actually paying bills early. Which means since nothing is ever late my credit score is constantly increasing. This put me in an excellent credit position. When I was ready to buy a car or a house I was given the best interest rates. Plus getting a better handle on my money and spending allowed me the ability to see when I had extra money left over and use it to start paying bills off early. Paying off bills allowed me to free up more cash that I was able put into saving and create an emergency fund where I could break the never ending borrow cycle. By utilizing financial allotments through epp I was able to put this saving on automatic. If you are unfamiliar with financial allotments click here and read the previous article I wrote to understand how they work.

Ms. Smart