By Christi Posner
Paycheque planners make learning how to live on a budget a breeze! Imagine this: your bills are paid on time every month, you’ve got money going into savings every paycheque, and you even have cash to spend! It’s all possible with these 6 steps.
Once you’ve done the hard work of creating an Excel budget, balancing your budget so you’re living within your means, and organizing your budget and bank accounts into fixed, savings, and variable expenses, you’re ready to plan out each paycheque!
Stop Living Paycheque to Paycheque With Six Easy Steps
Believe it or not, you can stop living paycheque to paycheque! If you are sick of running out of money before the next paycheque comes, just follow these 6 steps to paycheque planning.
- Grab a calendar
- Record income
- Write down bills
- Make a plan for savings
- Divvy up your spending money
- Do a walk-through of a typical month
Budgeting and paycheque planning is simply creating a plan for your money, and that’s exactly what we’re going to do! Grab a calendar and turn to the next full month. We’re going to create a typical month with your money.
All household budgets begin with knowing your income. On your calendar, record how much you get paid on each payday in that month. Don’t forget to record all sources of income and when they come in, including child tax benefits, pensions, and so on.
Want to see what it’ll look like living on a budget? Time to start writing down your bills. On your calendar, record the amount of your bills on their corresponding due dates. Review your budget, your bank statements, and your credit card statements to ensure you haven’t forgotten any bills.
For bills that are due every 2 or 3 months, pretend that half, or a third of the bill is due every month. Figure out what date the bill is usually due on, and write half or a third of that bill amount on that date. This way, you will save that money each month instead of spending it, and the bill will be ready to be paid in full when it’s due.
If You Live Paycheque to Paycheque, Your Bill Due Dates May Be to Blame
If you notice a cluster of bills due around the same time of the month, this may be why it feels like you’re living paycheque to paycheque. Often people feel like they don’t have enough to go around one paycheque, and then have leftover money the next.
Many bills, by default, are due at the end or the beginning of the month. Most due dates can be moved to a different day in the month, simply by calling and asking.
Try and balance out your bills evenly with your paycheques, and then call the corresponding bill companies and ask them to move the due date for your bill in the future.
If you’re wondering how to budget and save your money for irregular expenses like Christmas gifts or annual expenses like house insurance, here’s how. Look back at your monthly budget, and see how much you need to save each month. Divide that amount equally for each payday in your month, and write it on your calendar as a bill to pay to yourself.
This means that on payday you’ll get paid, and immediately transfer that money to savings so it’s out of sight, out of mind! Do the same with all items you are saving for. Balance the savings equally between paycheques.
Ready to make a plan for clothes, entertainment, and grocery shopping on a budget? We’re going to divvy up your spending money! If you’ve already divided your budget into three categories (fixed, savings, and variable expenses), you know how much spending money you have in a month.
Divide your spending money equally by your paydays. This is the money you will either transfer to a different bank account for buying items you typically buy in a store, or will take out as cash for your budgeted spending money. Remember, once it’s gone, it’s gone! You can’t get anymore until your next payday.
Just like when renting a new apartment, financial budgets require a walk through. Let’s walk through your typical month.
Start with the first payday of the month. You get paid! Plug the amount into your calculator. Now you have to save some money, so subtract your savings. What spending money do you have for the week? Subtract it too. What bills do you have to pay until your next payday? Subtract those.
Walk through your paycheque plan day by day, and make sure you never go into the negative.
The goal is to break even, or have a couple dollars left over until your next payday. If at some point you notice your calculator goes into the negative, you’ve got too much allocated to that paycheque, so see if you can move one of your bills over to the next paycheque (by changing the due date, not paying it late sillies.)
Beyond Budgeting - Learn How to Prepare a Budget with a Non-Profit Credit Counselling Agency
Living on a budget isn’t just about creating a money plan on paper or on Excel; we’ve got to go beyond budgeting. We have to put a plan in action that plans for the best, but prepares for the worst.
If you’re having trouble balancing your budget, or figuring out how to put it into play, let a non-profit credit counselling agency help you for free. That’s their job - to teach how to manage your money properly.
A Paycheque Planner Shows You How to Live on a Budget
A paycheque planner is a written plan for how your paycheques will be used, and are the key for learning how to live on a budget. Once you have a typical month written down that works from one paycheque to the next to the next, the plan will continue to work in upcoming months. Just fill out the rest of your calendar.
Spending five minutes to look over your paycheque plan each payday will ensure you reach your savings goals, pay all of your bills on time, and spend within your means. Now that’s a plan that works!