Scheduling your monthly bills?

[snafu]

I wonder if you have irregular bills like annual/bi annual car & house insurance or quarterly water bills. I've divided those sums & gift category into 12 segments added to the expense side even though its paid out irregularly. Most importantly, I pay myself 1st. You mentioned $100., I'd suggest transferring the sum to savings as soon as pay hits the a/c and before paying any bills. All our bills are now paid on-line, no matter what day they arrive or due, I do a 20 minute 'desk day' weekly so that everything is paid at least one business day before it's due date.

It helps to keep a set 'float' as DS mentioned. We get no cost bank transactions by keeping a minimum of $ 1,000. in our chequing a/c. It does double duty by also being thought of as fast cash Emergency money. If you've ever had the experience of being evacuated in an emergency situation, the principal of fast cash underlies plans. I also 'sweep' unspent sums into savings which is really just a holding zone for my investment plan. In these days of super low interest, I have boosted Dividend ETF and International MF with thrilling results.

If you remain fixed on pay dates, you might call creditors and request specific due dates.

[Petunia 100]

Last month was only $1,984. Before that, $2,132. So, there abouts.

Basically, I should have at least $100 going to savings each month.

When I netted $1,600/mo and bills were about $1,450, I was saving the difference. No reason I should not now, other than being confused with bill payment schedules and the couple of times I paid the same bills more than once in a month. Haha.

It's a cash flow problem, since your paydates are not consistent, right? So, there are 2 methods you might use to solve the problem:

1. Keep half a month's net pay cushion in your checking account. Proceed as usual, the cushion eliminates the timing issue.

or

2. Deposit all paychecks directly into savings. On the 1st of each month, transfer $963 from savings to checking. On the 15th of each month, transfer $892 from savings to checking. Pretend the 1st and the 15th are your paydates. This method has a built in advantage: any additional pay (extra hour of work, 3rd paycheck) is automatically saved.

Also, I suggest you keep a "bill book". I have done this for almost 30 years now. I keep a ledger where I simply list the bills I must pay each month. I also list any irregular bill I pay (such as my annual car registration). When I pay one, I write in the amount paid, note the check number (if I use one, less often these days than when I started), and highlight the amount paid. I write the month and year at the top of the page, each month on its own page. At a glance, I know what I have paid and what I haven't paid. If it isn't highlighted, it isn't paid. You will never pay a bill twice again. Also, it is a handy place to store bills until I am ready to pay them. No more searching for the water bill.

I still keep mine in a bound ledger or composition book, but it would be so easy to use a spreadsheet.

[Frügal]

Great ideas, all.

Dontgopoor, that is pretty much how I did it before. I think, however, I may try Petunia's method. Definitely bookmarking this thread for future reference.

Just one more question.

What if we do not spend all of a budgeted category? For instance, if we do not spend all of the Health & Beauty budget.

[disneysteve]

Petunia's method will work. Personally, I don't want the hassle of transferring funds like that. I just keep it simple and keep the money in the checking account. Yes I lose a little interest but with rates so low, it isn't a big deal. When an excess accumulates in the checking account, I transfer it out, just leaving my 4K buffer. For you, the buffer only needs to be about $1,800 and really not even that because you get paid every 2 weeks so you could keep a smaller reserve and be fine. For now, I'd try the $1,800 reserve just to get comfortable with the process. After a couple of months, see what your lowest balance point has been and you can reduce the buffer to just over that amount. For example, if you find that the balance never drops below $800, then you probably only need to hold $800 or so as your buffer. The rest can be in savings.

[BMEPhDinCO]

I second DisneySteve's last comment - just KISS the money (keep it simple, stupid). In other words, if you have 1 month of bills in an account, transfer all that to checking RIGHT NOW. That'll be your October funds. Then the paychecks from this month are for November - you can put them where ever you want for now, just be ready on Oct. 30th to move them into checking to cover the November bills.

If you have extra left in a category, put it into savings so that if a month costs MORE than you budgeted, you can take it back out. Although right now, anything extra should go to building up your emergency fund.

Also, no one has mentioned this yet, but you are a classic case for using You Need a Budget software (YNAB - check it out, even the forums are useful). It doesn't really work for me, since I am already set up and prepared, but if you are struggling, it is perfect.

[JoeP]

My pay goes into savings, my wife's pay goes into checking. When we get a bill, it is either paid as it comes in, or earmarked against a deposit from our pay.

Mortgage: always paid from savings as a fund transfer, as our mortgage holder is the same as our account holder.

All other bills get paid from checking. If it is a non-mortgage pay week, my pay gets transferred to checking to cover the bills and provide some cushion. We also auto-deposit fixed dollar amounts from our pays into sub-accounts in order to cover certain expenses (what cooliemae said).

[herdjohnson]

I get paid bi-weekly as well, and you shouldn't be having the problem of paying the same bill twice. A two paycheck cycle is only 28 days, so you should never have to pay the same bill twice in that period.

I pay rent, power, natural gas, and charity out of my first check.
I pay insurance, cell phone, and cable out of my second check.
The paycheck that spans the first of the month is always the "first" check.

So then, as you said, you always have a "free" paycheck every 6 months where you only have the normal food, gas expenses.

I usually pay all of my bills as soon as they become available on my credit card, and then transfer the money to pay of off when the direct deposit comes in for my paycheck.

Pretty easy system, and I always end up with zero in my primary checking.

[breathemusic]

I have found that setting up separate accounts for particular purposes has made my life alot easier. I have an account for our cars (insurance, registration, repair), utilities, and misc. monthly payments. I just figured out my monthly average for everything and then have the money dd out of my paycheck directly into the various accounts. Over time the accounts have built up extra money to cover the high power bill that might come in or the car repair that comes up.

Over the long haul, it really won't matter when you schedule the bills because the money will already be sitting there.

We then have a separate EF just in case the worst happens.

I do something very similar. I have a separate checking account for all of my bills that are the same every month (student loans, cell phone, etc) And then I just have a set amount of my paycheck that is direct deposited into that account. All I ever have to leave in that account is a buffer of a few hundred bucks to account for paychecks not coming in at the same time every month and that account pretty much takes care of itself!

[markr867]

How do you do what we're proposing? Keep a buffer in your checking account. Figure out how much you need to keep in there to avoid the problem you're having. Let's say your monthly bills are $3,000. At the end of the month after all of your bills are paid, you should have $3,000 remaining in the account, all ready to deal with next month's bills. If you have more than $3,000, transfer the difference to savings. If you have less than $3,000, transfer money in from savings. That way you are always one month ahead and won't ever be waiting for a paycheck to come in before you can pay your bills.

This is exactly what I do, and from personal experience, it is the most hassle-free, easy way to handle monthly expenses.

I have expenses of ~$2100/month, so every month I start off with $2500 exactly in checking. Most of my bills are paid within the first week of the month (I like to get everything out of the way), so my checking account drops pretty low until the 15th (although it has never gone below $500). Then I have a few small expenses like food/entertainment until my check on the 31st. On the 31st of each month I transfer anything over $2500 into savings. If something unexpected came up, or if I'm over-budget on something, I just transfer from savings.

I never have to worry about when a bill is due or if I have enough money in checking to cover an expense.

[Gailete]

Just recopying what I wrote on another thread in case you missed it, since it sounds like you are in my situation. This was the only way I can efficiently pay all our bills when due and that is to tackle them each week on the same day and keep track of them for future reference since most of them will show up next year as well!

~~~
We are on a tight budget and it would be a dream to have even a $1000 buffer in our checking account. Between my disability, and a small pension and self-employment income our money trickles in all month. For close to 15 years now I have a system that keeps things from falling through the cracks especially useful for when things are tight. I use a spiral notebook that I use a page for each month and since I get my SS on a Wednesday it is based on those. In each quadrant of the page is that date of each Wednesday for that month. Any bills that come due at that time are listed there (always giving enough time for them to arrive). Each Wed. I sit down and go through any bills that came in for the last week. Write them down where appropriate in my book as some things like property taxes and driver license renewals come way early. I also yearly when I set up the book, go through and write down all the usual and customary bills that come due during a month so things like house and car insurance, estimated taxes, etc. aren't a surprise, if you have to budget an amount for Christmas (I'm always surprised at the people that somehow forget that Christmas always comes on Dec. 25 and have no money or presents set aside and then ‘have’ to borrow). After making sure that I know what all needs paid and have balanced the checkbook--each week, easy with on line access, I pay the on line bills and set the money aside in the checkbook for the automatic withdrawals for things like my Medicare supplement that gives me a $2 discount each month for paying automatically. Write what checks are needed. If we are lucky we have money for groceries, and maybe some savings, etc.

It may sound complicated, but it works. The most important thing is to have a set time to pay bills, a set place to keep bills, envelopes, checkbook, stamps, pen, calculator, etc. and then do it. I save over $100 a year by using on line payments and not paying for stamps or having some items like our IRAs on line which saves us $25 a piece each year. Those savings can add up.

So for those of you that are flat broke and also dream of $4000 buffers in their checkbooks, there are ways to get those bills paid on time and no chance of thinking, "oh goodie I just got a $200 bonus" spend it all and then notice that you just got a yearly bill for $200 that you had forgotten about! I think the closer you are to the line, the more organized you have to be so you know your financial state and there is no lying to yourself that you can afford something that you can't. One of the reasons we don't have cell phones, cable, newspapers and a whole slew of other things that everyone else sees as a necessity. We can't afford them so we don't have them.
~~~~

[Frügal]

Just recopying what I wrote on another thread in case you missed it, since it sounds like you are in my situation. This was the only way I can efficiently pay all our bills when due and that is to tackle them each week on the same day and keep track of them for future reference since most of them will show up next year as well!

~~~
We are on a tight budget and it would be a dream to have even a $1000 buffer in our checking account. Between my disability, and a small pension and self-employment income our money trickles in all month. For close to 15 years now I have a system that keeps things from falling through the cracks especially useful for when things are tight. I use a spiral notebook that I use a page for each month and since I get my SS on a Wednesday it is based on those. In each quadrant of the page is that date of each Wednesday for that month. Any bills that come due at that time are listed there (always giving enough time for them to arrive). Each Wed. I sit down and go through any bills that came in for the last week. Write them down where appropriate in my book as some things like property taxes and driver license renewals come way early. I also yearly when I set up the book, go through and write down all the usual and customary bills that come due during a month so things like house and car insurance, estimated taxes, etc. aren't a surprise, if you have to budget an amount for Christmas (I'm always surprised at the people that somehow forget that Christmas always comes on Dec. 25 and have no money or presents set aside and then ‘have’ to borrow). After making sure that I know what all needs paid and have balanced the checkbook--each week, easy with on line access, I pay the on line bills and set the money aside in the checkbook for the automatic withdrawals for things like my Medicare supplement that gives me a $2 discount each month for paying automatically. Write what checks are needed. If we are lucky we have money for groceries, and maybe some savings, etc.

It may sound complicated, but it works. The most important thing is to have a set time to pay bills, a set place to keep bills, envelopes, checkbook, stamps, pen, calculator, etc. and then do it. I save over $100 a year by using on line payments and not paying for stamps or having some items like our IRAs on line which saves us $25 a piece each year. Those savings can add up.

So for those of you that are flat broke and also dream of $4000 buffers in their checkbooks, there are ways to get those bills paid on time and no chance of thinking, "oh goodie I just got a $200 bonus" spend it all and then notice that you just got a yearly bill for $200 that you had forgotten about! I think the closer you are to the line, the more organized you have to be so you know your financial state and there is no lying to yourself that you can afford something that you can't. One of the reasons we don't have cell phones, cable, newspapers and a whole slew of other things that everyone else sees as a necessity. We can't afford them so we don't have them.
~~~~

Correct me if I am wrong, but you're basically just paying bills by the week, instead of every other week, like I do?

[Gailete]

Correct me if I am wrong, but you're basically just paying bills by the week, instead of every other week, like I do?

Yes, I'm paying them by the week, BUT as I track when bills are due and when they need paid as I can keep 5-6 worth of payments in one notebook, I get that sense of when bills will be due on a yearly basis as well as monthly, I don't miss any, AND if a bill should be paid yet I don't have the actual bill in hand I go looking for it. No surprises. You seemed to be having trouble keeping track of when bills needed paid, and felt like you were paying some bills twice a month, etc. Having a separate page for each month that includes the 4 or 5 days in the month that I do my bills, I never am paying a bill twice in a month, all bills are paid on time and you can see if you have extra or that a huge bill is going to be due the first week of the month.

I guess for me the difference is keeping track of everything on paper so within a few months, you know that even when your paycheck seems to appear on weird days (this system has seen me through many different paycheck configurations) your bills really do show up at the same time of the month so that you can look forward to them. Even if it feels at times like you are living paycheck to paycheck, you can feel in control and hopefully can practice self-control when you pay the bills one week and you only have $45 worth one week, but you can see staring you in the face next week, $1045 worth of bills. You KNOW then you don't have any spare cash probably. This isn’t the time to buy that thingamabob you want but don't really need.

What I am talking about is organization which sounded like you don't have at the moment. I wish I could explain it better. It sounds like lots of people on this board have a whole lot more than some of us. No jealousy, but I've never in my life been able to run a buffer of money so that whenever a bill came in I could just pay it. If it isn't scheduled to be paid, it waits because another bill may be due sooner. We have VERY irregular income and without a system in place that gives me brakes, it would be impossible to keep my bills paid and on top of things. Note: long with bills, I also will write down any charitable giving or even what amount to shift to savings. I can do what I want since it is my notebook. Much cheaper than buying a computer program or buying some budget book from the store as these are the 10-15 cent notebooks that you can buy at the beginning of the school year. I don’t rip the pages out when done. I use them to look back at the beginning of the next year to see what will be coming up in June. Also at tax time I is great for remembering how much you paid for things like taxes, etc.