Montly Fixed Expense Budget

[macher]

Hi we get paid weekly. Let's say our montly fixed expenses are $3000. Is it better to base the $3000 expenses based on $3000/4 weeks or $3000x12 months/52 weeks? Want to know how much we need to put away to cover our monthly expenses.

I did a spread sheet up to 2 years and it looks like the $3000x12 months/52 weeks= $692/week to put away to cover montly expenses will work if we start doing this May 2015 which is a 5 week month.

These are fixed expenses such as mortgage, utilities etc.

[phantom]

I don't think it matters much as long as you keep a buffer in the account such that you don't care when exactly the money comes in. Personally, I'd probably pull the same amount from every paycheck so that I could either set up an automatic transfer or set up direct deposit to put some money there directly. Alternatively, I might take the whole paycheck until I had the $3000 covered each month.

But, I'm not sure what you mean by fixed expenses. Are you on a budget plan such that your utilities are the same every month? My utilities vary greatly depending on the time of year.

[disneysteve]

If you do it based on 4 weeks, you actually build yourself a little buffer because a month is longer than 4 weeks (except Feb. of course). If you do it based on 4 weeks/month, you'd be setting aside $750/week. If you do it based on 52 weeks, you'd only be setting aside $692.

[macher]

If you do it based on 4 weeks, you actually build yourself a little buffer because a month is longer than 4 weeks (except Feb. of course). If you do it based on 4 weeks/month, you'd be setting aside $750/week. If you do it based on 52 weeks, you'd only be setting aside $692.

Thanks. We already have a buffer that I built up. $692/week is more comfortable than $750/week and more doable.

[disneysteve]

Thanks. We already have a buffer that I built up. $692/week is more comfortable than $750/week and more doable.

Then that's the way to go. As long as you have a good emergency fund to cover the unexpected stuff, you should be in good shape.

[snafu]

When we started we were both only paid the last business day of each month with monthly and intermittent basic expenses due on different days. We devised a budget to include variables like vehicle operation and maintenance as well as intermittent items like annual auto & rental insurance for example and scrimped to set that total into a linked savings account, easily transferred to chequing as needed.

Since you are paid weekly, I hope you are using a Credit Union or financial institution that gives a lot of no cost services as banks are adding new fees for formerly 'free' services. Also we all identify different line items as 'fixed expenses.' Living in a snow belt, we find it convenient to use the 'budget plan' for heat, electric, water, trash so that the same sum goes each month until October reset. I decided to include 'food' [grocery/restaurant/take-out] at a set budgeted sum as it gives 'wiggle' room when I want something unplanned. When we saw too much unaccounted 'leakage,' we chose to give ourselves 'allowances' for incidentals we didn't want to manage like hair cut or a drink out with friends/colleagues. Once that sum is gone, spending in that category ceases until the next pay.

I hope you understand that I use February's earnings/set aside for April's expenses. In May, the money will have been set aside from March...just waiting. I've found it efficient to use automatic withdrawal for repetitive, set sum expenses which you likely already do for mortgage + related payments like municipal tax etc. It helps to create a routine for money management, two business days from end of month, review upcoming expenditures for example.

[macher]

When we started we were both only paid the last business day of each month with monthly and intermittent basic expenses due on different days. We devised a budget to include variables like vehicle operation and maintenance as well as intermittent items like annual auto & rental insurance for example and scrimped to set that total into a linked savings account, easily transferred to chequing as needed.

Since you are paid weekly, I hope you are using a Credit Union or financial institution that gives a lot of no cost services as banks are adding new fees for formerly 'free' services. Also we all identify different line items as 'fixed expenses.' Living in a snow belt, we find it convenient to use the 'budget plan' for heat, electric, water, trash so that the same sum goes each month until October reset. I decided to include 'food' [grocery/restaurant/take-out] at a set budgeted sum as it gives 'wiggle' room when I want something unplanned. When we saw too much unaccounted 'leakage,' we chose to give ourselves 'allowances' for incidentals we didn't want to manage like hair cut or a drink out with friends/colleagues. Once that sum is gone, spending in that category ceases until the next pay.

I hope you understand that I use February's earnings/set aside for April's expenses. In May, the money will have been set aside from March...just waiting. I've found it efficient to use automatic withdrawal for repetitive, set sum expenses which you likely already do for mortgage + related payments like municipal tax etc. It helps to create a routine for money management, two business days from end of month, review upcoming expenditures for example.

Our fixed expenses that don't change are mortgage, real estate taxes, auto/home insurance, gas/electric, car payment, water, sewer, cell phones.

Real estate taxes go up every year so weekly budget gets tweaked every year. Gas/electric we are on a budget plan where the bill is the same every month. Water is a variable but I have it budgeted on the high end. Auto/home owners insurance can either go up or down every year depending so that gets tweaked. Everything else is pretty much fixed.

[Leo]

I get paid biweekly too. I budget my expenses monthly. The good thing about that is there is 2 extra paycheck I can put in savings or I can use it to pay recurrent annual bills like AAA membership etc.

[CashUp Sammy]

I get paid biweekly too. I budget my expenses monthly. The good thing about that is there is 2 extra paycheck I can put in savings or I can use it to pay recurrent annual bills like AAA membership etc.

I have found over the years that a monthly budgeting works best, despite getting paid fortnightly.

I wish I got paid everyday though!

[Nutria]

If you can swing it: 4 paychecks / month x 12 months = 48 paychecks. The other 4 go into savings or expensive debt reduction.

If you can't swing it, I'd "buffer up" (get a few thousand dollars in the checking account and budget for "52 / 12". Your checking account balance will fluctuate, but so be it.

(I get paid biweekly, and live on 24 checks per year. The 2x per year -- May and November -- extra paychecks go to our children's parochial school tuition fund, so that we don't have to save so much every month.)

[Nutria]

My utilities vary greatly depending on the time of year.

I went through my previous 2 years of electric bills (being on a web bill payment system made that easy) and got the average. This was in the autumn when the bills were dropping. I've been paying the same every month since then. Currently my balance due is $-126. That'll start heading towards zero this month...