How I Budget for Bills

No one enjoys paying bills. I for one hate them with a purple passion so I strive to have as few as possible.

When I moved out on my own decades ago, I really struggled. It never seemed to fail; a bill would come due before payday arrived or my check would be short and I wouldn’t have enough. I would sweat bullets every single month as I tried to juggle my finances.

Eventually I worked out a way to resolve the issue. I would pay all of my bills on the first of the month after saving the amount needed the month before. Since I didn’t want to be broke while I saved up the money, I would work out just how much I needed to save every single week on a spreadsheet.

Now that I’ve got a regular paycheck I’ve been able to build up a cushion in my checking account. Thanks to this cushion I no longer have to painstakingly account for every upcoming bill each payday.

Since I know I will be safe if I spend $25 a week on laundromat and extras, I pull that out of the bank and keep it in my pocket. When the money is gone, that’s it. No more little extras until the next payday. That prevents me from accidentally dipping into my bill money. The rest of my paycheck is left in my bank account until the first of the next month.

When the first of the month rolls around I pay all of my bills manually. Once that task is completed I look at the amount that is left. A portion of it (usually half) is sent to my online savings account while the rest is mine to spend or save as I please.

My financial cushion is kept untouched.

How do you budget to pay your bills every month? Please share your stories in the comments below.

6 thoughts on “How I Budget for Bills”

  1. I’m getting ready to retire so this year I am living on what I expect my retirement income will be. That goes into the bank and the rest goes to savings. I get paid every two weeks so I pay my any bill that will be due before my next pay. I always pay every bill 3 days before it’s due to avoid late payments. What ever is left goes for groceries and things I need- which is not much these days. Anything left goes into savings for life’s unexpected expenses. This way I will know after a year if I can live on my retirement income or if I need to keep working for a while.

    1. That is brilliant Karen! Please keep me posted on this…I want to know how well you succeed. I’m so happy that you are so close to retirement. Congrats!

  2. I, too, hate paying bills and I have automated as much as I can, having it taken out through electronic banking. While that makes paying the bills easier, it doesn’t help me budget. I know how much my basic bills are and put that aside in the account. However, the unexpected bills never seem to end. I am working to pay down credit card debt and rue the day I ever got my first credit card! It seems that when I finally get a cushion, it gets taken by something I hadn’t planned on. I have decided that my best bet is to reduce my expensed to the bare minimum as soon as I can. I would love to get rid of my car like you did. Sadly, family and work responsibilities prevent me from doing so at this time. Just picked up your updated book, The Shoestring Girl Book- thanks for making it affordable.

    1. Credit cards can really hit you where it hurts if you don’t pay off the balance every month. I wish you luck in eliminating them! As for vehicles, they are an incredible expense. I never realized how much they cost until I eliminated mine. Every time I think of getting another one my wallet screams in protest! If I ever really need to take a trip out of town I’ll just rent one. It’s cheaper that way.

      One thing I learned with automated billpay is that it is easy to miss little add-on charges that way. Since it is automatic you don’t really think about examining your bill every month. It’s also easy to subscribe to little services that add up over time. For instance, I have several friends who pay around $10 a month just to use the modern version of Microsoft Word instead of investing in an older, non-subscription version or one of the many free word processing programs available. Other friends have subscribed to magazines they never read or services they never use. As long as you pay attention to your bills, however, they can be an incredible time saver. Good luck on getting your expenses under control!

  3. Two thoughts come to mind when reading your post… First of all, congrats on being willing to sock away almost half your pay into savings! Kudos! That in and of itself is a testament of how you have wittled down your living costs so low that you are able to save/invest almost half of your pay! Great skill :)(btw…have you reconsidered teaching cost cutting or “cheapskate” seminars to folks on a local level? The library would be a great venue “)

    The other thought is kinda random but still related. There was a fiasco in Ontario a couple of years ago, for people who put their hydro electric bills onto “automatic bill pay”. There were some “untrustworthy” staff working for the electric company that overcharged several folks and “automatically” grabbed thousands of dollars from these poor folks who had their bills on “auto-pay”.
    These staff members promptly resigned when the jigg was caught, but that didn’t prevent the shock and horror! How could a public utility company steal from regular consumers like that!
    As a consumer and pretty optimistic gal, I was aghast that the public trust had been so easily misused. I had read sometimes how cheapskates avoid putting their bills on autopay for precisely this reason: that it gets too tempting for some companies to just take what they wish directly from people’s accounts.

    So, that brings me back to what I noticed that you wrote that you pay all your bills manually. This may take a fraction of a hair of a second longer than it would take for someone to have a bill paid “automatically”, but so worth it to many. Nobody can pull the wool over the eyes of someone who pays their bills themselves…because the amounts are in real time and must pass through our own rigorous scrutiny “)

    1. Hello Carla!
      I know exactly what you are talking about! I’ve had friends come to me desperate because an automatic payee drained their accounts more than once! In my personal experience, I’ve been hit with unexpected higher charges as a result of this or that, and those can really hurt. The last time I encountered this was several years ago when I subscribed to Amazon Prime. They advertised a payment plan of so much a month, but didn’t specify when you signed up that you needed to take an extra step in order to pay monthly. I choked when my bank was hit with a $100 charge! It was quickly sorted, but reinforced my decision to avoid automatic charges whenever possible. It’s just not worth it.
      Another note on this subject. Back when I had my computer repair business, an elderly lady called me crying. Her bank account had been emptied and she believed that a young relative had hacked her. Could I help? I did some investigating and discovered that she had received a phone call about a discount card for prescriptions. It was only supposed to cost her a couple of dollars, so she gave them her checking account info so that they could withdraw the funds out of her account. It ended up being a scam. While she was relieved that her family member wasn’t involved, it did nothing to help her finances. Every single penny she had was gone, and all I could do was refer her to her bank.
      I’ll never forget listening to her cry.

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