Dismissing the Necessity of Car Debt.....Almost

     If you want a vehicle, then you must also accept being in debt for it. Right? Common practice suggests that debt for a vehicle is simply part of life. Does this necessarily have to be the case? Everyone has his/her own reasons for his/her decisions on this matter, but as for my husband and I we've decided to buck convention and dismiss the idea of car debt being a necessity in life...well, almost. I'll explain a little more on that later, but for now let's take a closer look at the real cost of purchasing a vehicle through a loan.

      There are two factors against you when you purchase a vehicle through a loan: 1) vehicles depreciate rapidly and 2) interest charges add to the amount owed. In other words, in a very short amount of time you'll owe more than the vehicle is worth. Even more gut-wrenching is the amount you will have paid over the purchase price when you complete repayment (and keep in mind the vehicle is worth far less now than the purchase price). What's the real worth of this common practice and is there another way to owning a vehicle?

      A month after we married one of our cars died and had to be replaced. With such a sort time frame to work with we hadn't even begun to be able to save for a replacement. We had to pay what little we could in a down payment and then the remainder came in the form of a bank loan. The original length of the loan was three years. We determined, however, that we would try to pay it off as soon as we could. We lived below our means, did without what everyone else had, and put every extra money we could towards the loan. Two years later, we've written the last check and saved ourselves a significant amount of money that would've gone towards interest! 

     Of course, this car isn't going to last forever (though we're pushing it to give us it's best!). We've got to think ahead to the next vehicle. Conventional practice would advise us to go ahead to purchase another vehicle through a loan again. After all, why continue to put up with a car that seems to need constant attention? And isn't it sometimes it's best to cut your losses and move on (ie plunge ahead into another full car loan)? Maybe, or maybe not.

      While I agree that the reliance on loans to purchase a vehicle is a costly option, I also acknowledge that our current vehicle will likely not last long enough for us to save the full amount for a purchase. (Dave Ramsey's advice is to drive the junker until you have cash to purchase. However, this is assuming that the vehicle doesn't have any issues or repairs that impede it's ability to run properly). Our plan is a middle road between convention's all-loan and Ramsey's all-cash plan. We've already demonstrated the monthly payment amount and total purchase amount that are manageable for our lifestyle. Our goal is to save for enough of a down payment that would, in turn, cause the loan necessary to be taken to be no more than what was previously taken. We intend for the  next car to be an upgrade from our current one, but purchased without expanding our decided loan limit. Through that method, we can either  slowly make progress in purchasing newer or nicer vehicles. Or, we could choose at some point to not upgrade, continue to drive what we have longer (nicer, newer vehicles should be able to do this better), and save for complete payment in purchasing a vehicle. The third option would be to choose not to upgrade, continue to drive what we have, and begin working towards purchasing a second vehicle in a similar fashion. 

       That's three options, when common practice only offers one! When we consider why we're making difference choices and living differently, we consider what we'd have to give up to do otherwise. To purchase a vehicle mostly through loan we'd have to concede that homemaking isn't a reality and that it is necessary for both individuals to work outside the home. That situation wouldn't be due to a necessity but due to wants. Though unconventional, our basic need for transportation is currently met and will continue to be met through our own process of making future purchases. It's the want for nicer, newer or two means of transportation that would urge us to take in more debt and force us to give up the home and family life we've devoted ourselves to create. We wouldn't for a moment trade for a car our life of being so fully present and committed in our home and marriage. It just isn't a good deal for us.

       In making the decision to incorporate homemaking into our lives, we also made the decision to find ways to make it work. When it came to our vehicles, we first determined to share a vehicle and then work towards an alternate path for purchasing future vehicles. So, yes we go against the grain of what is "normal." (I like Dave Ramsey's opinion of normal- "normal is broke." So why wish to be come that?). So, if your heart and calling is for homemaking then be encouraged that it is possible! This is just another means of making it so. 

             

Here is a video from the Dave Ramsey team. I disagree with the assumption of a purchase price being $26,000 (?!) and monthly payments of $464 (?!). Those numbers don't seem realistic to me for a vehicle, but that could be because we strive to keep ours much lower. Nonetheless, I find the premise of saving money for purchasing a vehicle inspirational and highly recommendable. 

Linked up at: A Mama's Story, The Better Mom, Covered in Grace, The Life of Faith, The Modest Mom, Thankful Homemaker, Time-Warp Wife, Far Above Rubies, Growing Home

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The Family Car

Image Source

What is the value of each individual owning a vehicle? I began to toss this question around more and more this year. When my vehicle is predominantly sitting parked in the parking lot, then its necessity and alternate use for it’s worth comes to be questioned. Yet, I also considered what owning my own car represented- wealth, status, convenience, and even entitlement. We do not live in an area with public transportation or biking paths, and so I wondered if it would even be feasible for us to downsize to sharing only one vehicle.

There was a time in which families did share one vehicle- the family car. All driving members of the family had to make arrangements necessary to accommodate the needs or wants for its use. What allowed one car to be sufficient then but not now? Perhaps it has to do with expectation. As vehicle ownership increased in time so did the expectation for such. The seeming norm now is for each driving member of a family to have his or her own vehicle. In fact, it is not unusual for sixteen or seventeen year olds to be provided a vehicle of his or her own (but not necessarily true ownership). There are certainly many, many other factors at play for the greater possession of vehicles now in comparison to previous times. Expectation is simply one.

          

      After much discussion my husband and I made the decision to sell one of our two cars.  We weighed the pros and cons to making this rather big decision, and the following were the factors that were considered:

Advantages:

• ·         Avoid costly maintenance/repairs.
• ·         Financial stability
• ·         Decreased insurance payments, taxes/registration/tags
• ·         Option to replace two older vehicles for one more reliable one
• ·         Eliminates a "yours" and "mine" mentality within our marriage
• ·         Humility

Disadvantages:

• ·         Inconvenience
• ·         Lack of transportation in the event of an emergency
• ·         Immediacy of purchase if a two-income situation were to be needed
• ·         Judgment for choosing to live differently

     Ultimately, the advantages outweighed the disadvantages. We’re still discussing whether we want to trade in the remaining car for a newer vehicle. After finally achieving no car payments and one less debt, I’m reluctant to rush back into another one. Even then, we’ll continue to be a one car family. It takes a little more planning and intentionally if just one of us needs the car. Sharing a car also takes compromise. All of these qualities are good characteristics to develop personally and in a marriage. Sharing a car is simply another means of doing so.

Everyone’s situation and needs for transportation are unique, and I will certainly not assume that what has been appropriate for me and my husband is the same for others. If you are considering downsizing to one car, however, then I hope to encourage you with my experience.

Linked up at: A Mama's Story, Courtship Connection, The Alabaster Jar, Thankful Homemaker, Growing Home, Time-Warp Wife, Women Living Well

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Shucking the High Cost of Summer Drought

     My husband and I recently took a trip and all along the way the above scene was what we saw. Corn fields ought to still be green this time of year, but this year's extreme hot and dry weather has devastated crops. This situation isn't unique to the few states we crossed as it can be found all across the country. Taking into consideration that one fourth of products on store shelves ranging from foods to toiletries contain an ingredient derived from corn (3), not to mention the use in animal feed and automobile fuel, the impact will soon be evident by means of higher prices on an extraordinary amount of products we all consume. There are other crops that have been impacted by the drought. However, because corn is the largest crop grown and most diversely used it will be the one that the most attention will be given. There are a few ways to lessen the toll increasing prices will have on the family budget. Some tips will be appropriate to do now before the prices increase such as stocking up while supply and prices are still good, and others can be done when the true need arises.

Groceries
     Groceries will be the biggest area to see high prices. Three quarters of our grocery products contain a corn-derived ingredient (5). These components can be found in nearly every packaged/process/convenience food. Moreover, animal feed is comprised of corn or corn products. As a result, meat and dairy products are expected to also increase as high as up to 10%(5). 

Suggestions:

     ~Make the shift from packaged/processed/convenience food products to real/whole foods. Begin learning how to work with raw ingredients to create meals yourself. In essence, take a back to basics approach when it comes to food and meal preparation. You'll be surprised at how much you'll be able to do with your own hands! Familiarize yourself with corn-derived ingredients and select other options whenever possible.

     ~Prices aren't expected to increase until the end of 2012 or beginning of 2013 (5 & 6), and so take advantage of the prices currently in meats by stocking up in your freezer. Keep in mind that not all meats have the same life in the freezer. For instance, ground meat will keep well for up to three months while steaks and roasts will last up to six months. 

     ~If you can afford it, select grass-fed meat and dairy products. Although these animals aren't given corn in the same fashion as conventional animals, there may still be a price increase. Grass-fed meats and diary products are a better choice regardless of conditions, but are very pricey. If you can allot for it in the budget, then this would be a good time to go for it. If not, then wise use of whatever you can afford is best.

     ~Decrease consumption of meat or dairy products and supplement with vegetarian options. Plan menus to include meatless meals. Use beans and quinoa for a protein source.  You don't necessarily have to cut out meat or dairy products entirely because prices will be high. Just find a balance between meat meals and veggie meals. (My hubby is a meat-lovin' man, but we've done half meat and half mealtless meals each week and been satisfied in doing so. It is possible to do even if your man loves meals with meat as the main portion).

Automobile Fuel
     Changes in the price of crude oil as well as corn-derived ethonol will impact the gas prices.

Suggestions: The greatest strategy here is to apply ways to conserve gasoline usage.

~  Maintain your vehicle and tires in optimum condition.

~ Limit how much you drive by skipping trips or doing your errands all at once. Not only will you save in gas, but also in the wear and tear of your vehicle!

     

Electricity
      Electricity costs increase during a drought. Unlike the corn related issues stated above, higher electricity costs result from a decrease in water used to cool the generating plants and excess work required to keep your home cool in high temperature weather. My husband and I have seen this result in our bill compared to last year and you probably have too. 

Suggestion: The greatest strategy here is to again apply ways of conserving. 

     

~Set your thermostat to the highest tolerable temperature. Attempting to keep a 70 degree or less home in 100+ degree weather is tough on the system. You don't have to sweat in your own home, but if you need a sweater then perhaps bump up the setting.

     

~Use heat generating appliances early in the morning or late at night. The oven, stove, clothes dryer etc. put out heat that warms your space and causes your air conditioning to kick on more frequently. Simply, move the time of day you conduct this activity. On extremely hot days, plan salads for meals to give the stove a break. Also, clothes dried outside save a lot of energy not to mention leaving them sun-bleached and fresh smelling!

       All of the above are simply suggestion for how to lessen the impact that is expected to be had from this year's drought-ridden corn crop. Yes, the prices will likely go up but these things generally do fluctuate. The best tip of all is to not panic. Following just a few of these tips will help you to not feel the impact as much. Choose what is appropriate for your family. If you notice, all of the mentioned suggestions are valid regardless of the external conditions. It's wise to conserve and be mindful of what we consume regardless of economic/agricultural prosperity or decline. In fact, doing so during a plentiful time will allow you to better handle a time of less. 

Additional reading:
1. Corn-Derived Ingredients
2. List of Corn Products (click "Corn Products" under the header "Market")
3. Issues in American Commodity Farming
4. In a World Without Corn...
5. How the Drought Will Affect Consumers (and What You Can Do About It)
6. How the Drought Will Cost You

Linked up at:Your Thriving Family, Thankful Homemaker, Growing Home, A Mama's Story, The Alabaster Jar, Homestead Revival, The Better Mom, Covered In Grace, Raising Arrows, Deep Roots at Home

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Homemade Liquid Handsoap

      I've found that one of the greatest ways of making homemaking work with only one income in a two income world is to develop the knowledge and skill of making food or household items myself. Recently, when the handsoap in our home ran out I searched for an alternative to having to purchase it from the store. The less items I'm dependent on the store for managing our home, the better. When I did a cost comparison between the store refill bottle and the homemade version, the difference was laughable. See for yourself:

Store

56oz refill bottle (large store brand soap, nothing special) = $3.88, which is $0.069/oz

Homemade

1 gallon (128oz) = $1.18, which is $0.0092/oz!

           

      The supplies necessary to make homemade handsoap are simple and with some smart purchasing they're really inexpensive. I purchased the glycerin in an 8oz bottle from a local craft store and used an online 40% off coupon. So, it's cost was only $2.08, which is $0.26/oz. The soap was $3.72 for eight bars, which is $0.46/bar. With a total unit cost so low I could even go for the fancier soaps if I wished and still have a better value than purchasing it pre-made! I already had the fragrance, but if I hadn't I would've also used another 40% off coupon or waiting until it went on sale. Buying in larger quantities or using coupons/sales is a smart way to trim cost for homemade or DIY projects.

      The recipe isn't my own, but was found at The Farmer's Nest. Consequently, I'll offer the steps to the process but refer you to the original site for specific quantities. The original recipe doesn't include a fragrance and I didn't use any in my batch since my soap was scented. However, if you wanted to use an unscented soap and add your own fragrance, then I'd recommend adding it drop-wise and determining incrementally the amount you'd prefer. 

1. Supplies: Large stock pot, empty gallon jug or other container, glycerin, bar soap (x2), essential oil fragrance (optional) and dispensers. 

2. Grate soap bars.

3. Melt soap bits in a gallon of water on the stove. Add glycerin. 

4. Allow to sit until cooled (approx. 10-12 hours). It will be thick when complete, and so use a mixer or whisk to combine until a smooth consistency. 

5. Pour into container. 

6. Finished! A gallon of handsoap for less than a penny!

Linked to: Homestead Revival, Time-Warp Wife, A Bowl Full of Lemons, Thankful Homemaker, Growing Home, Far Above Rubies, Women Living Well, Little House in the Suburbs

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Money Management: Part 5

     We're finishing our Money Management Series this week. If you missed the previous entries, then read Part 1: Introduction, Part 2: Budgeting and Tracking, Part 3: Allocation and Payments Schedule, and Part 4: Debt.  This Friday, April 27, we'll fully conclude the series with a giveaway! The Lampo Group, inc. (Dave Ramey’s company) has kindly offered the book The Total Money Makeover and Deluxe Envelope System to be shared through a giveaway* here at Reviving Homemaking!  


Savings
      I consider three types of savings to be a great place to start in managing money (there is also retirement, investments, education etc, but we're starting at the beginning): emergency, nonemergency and envelope. The difference between emergency and nonemergency is expectation. In other words, when the washer and/or dryer need replaced the funds come from the nonemergency savings because you should expect that appliances will not last forever. The same idea is true for a replacement. It's often considered an emergency because it's frequently very sudden and very expenseive, but, again, vehicles don't function in perfect order forever and so it was simply a matter of time. And so, in a time when there isn't a screaming need it's wise to go ahead and put aside a few dollars or more each month towards such expenses so that you can avoid (some) of the shock of the impact when it does hit.
     An emergency is truly unpredictable. Losing a job can issue an emergency situation during the time you try to find a new one. The loss is far less severe if you had put aside a few months worth (amount typically dependent on the economy, but can need to be as much as 6 months) of living expenses. This scenario is actually a common suggested one in opposition to homemaking- the notion that it's insecure because it's based on one income avenue. Being prepared with an emergency savings is just one simple to this incident.

Envelope Savings

     Lastly, there is what I call envelope savings. It's the savings for big purchases or expenses. As much as we may want to think that we'll just leave it alone in the account, more times than not we'll find it spent somewhere. Therefore, it's best to go ahead and withdraw cash for these goals. For example, Christmas is a big expense no matter how you celebrate. It's much more manageable and enjoyable if by December I can purchase gifts with my envelope in hand of cash that I've saved over the last 6-12 months. There's no guilt, no budget starvation and best of all no debt. I also use this method for our annual vehicle taxes, birthday celebrations, more costly purchases, anything else that requires building up to buy.


Insurance
    Carrying insurance on your residence, vehicle and health is a wise investment to make. This is your safety net for in the event of any related misfortune occurs you are not left with the burden of total costs. We can drive our cars or care for our bodies as carefully as we can, and yet still find ourselves with a serious matter to resolve. Altough unpleasant to consider, you are not above accidents or ailments.
     Many insurance plans work off what is called a deductible. A deductible is a determined amount that you (the insured) will be held responsible for paying prior to the insurance company paying their part in accordance to the policy. Let's say, for instance, you have a $1,000 deductible after which the insurance company will pay 70% and you 30% (plans differ from this). That means if you need to receive healthcare services then you will be expected to come up with that $1,000. You will then be asked for an additional 30% of charges (insurance paid 70%). If you haven't received health care in a while, then let me advise you that even the smallest treatments will have a big billing statement. Can you handle paying over a thousand dollars like that? Most people can't and the knowledge of such leads them to  either avoid necessary action or stressfully scramble for the funds.  Your home/renters and vehicle insurance deductibles are the same. You're signed policy is essentially an agreement you made that says you will pay 'x' amount when necessary to do so. You're made aware of this from the moment the policy begins and so there is little acceptable reason for coming up empty handed because you thought you could just get by without this aspect of the plan.

      Even with the high costs of insurance coverage there are some ways to save. If you do not use your insurance benefits often, then you may be better off choosing a higher deductible and lower monthly payments. You don't get your money back at the end of the year if you didn't use your insurance much, and so why give the money away when you could be saving it for yourself? In this case, you're much better off to make the lower payments and put the difference into a savings specifically for deductible payments. At the end of the year if you didn't use it, then you have a little more to your account not theirs. The tempting idea is that you have "extra" money each month, but don't be a fool. Again, you agreed to be responsible for that deductible and so take action to be prepared.

*Note: I’m not an affiliate of any kind with The Lampo Group, Inc. or Thomas Nelson publishing. These materials were given to me by The Lampo Group,Inc. and it was agreed upon that they may be offered as a giveaway.  

Please feel free to leave any tips you may have in the comment section below. This is simply how I've come to work with finances, but I'd be interested to know of other ways as well. :)

Linked to: Homestead Revival, Raising Arrows, The Modest Mom, The Better Mom, A Mama's Story, The Straightened Path, These Five of Mine Plus Two, Time-Warp Wife, Growing Home, Thankful Homemaker, Far Above Rubies, Becoming a Strong Woman of God, Women Living Well, Deep Roots at Home, Raising Homemakers, A Mother's Heritage

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Money Management: Part 4

   We're continuing in our Money Management Series. If you missed the previous entries, then read Part 1: Introduction, Part 2: Budgeting and Tracking, Part 3: Allocation and Payments Schedule. Reminder: at the end of the month, The Lampo Group, inc. (Dave Ramey’s company) has kindly offered the book The Total Money Makeover and Deluxe Envelope System to be shared through a giveaway* here at Reviving Homemaking!   

       What would you do with hundreds of dollars more each month? Furthermore, how would you feel? I imagine that we'd all jump at an offer to be given more money or less stress. Truth is, that offer is available to us but we choose against it by tying our money up in debt. The concept is simple- the more money obligated to payments is less money for your own living, savings, giving, security etc. The path to freeing up our finances isn't simple and isn't easy, but is more than worth the endeavor.

         Don't be fooled into believing that debt is acceptable to carry in life because it is unrealistic to eliminate it. Not only is your money rendered unavailable for other uses each month, but it's also being thrown away by paying interest. By the end of the loan, you will have paid more for the item than it originally cost. If throwing money away is a distressful thought, then so should paying interest. Again, what could be done with that money instead? It's a matter of changing our thinking from being comfortable carrying debt to be so uncomfortable with it that we're willing to make changes towards eliminating it. I understand that there are times in which the urgency of a situation leaves little option but debt. When those times arise, do what must be done. However, in every situation thoroughly examine as to whether a little patience and sacrifice upfront can keep you from feeling forced into signing away more of your income. 

       So, how is this seemingly insurmountable task accomplished? One bite at a time! Dave Ramsey, Crown Financial and others use debt snowballing to get things moving.  It works by ranking your bills from smallest to largest balance, and then rolling one payment amount into the next loan as the previous ones are eliminated. To see this in action with your own debts, use this Snowball Calculator. I find it much more encouraging to have a visual of progress made. 

       The two financial advisers mentioned have a system of steps or destinations for achieving financial success. Both lump paying off consumer debt, which includes vehicle loans, student loans, credit cards etc, in one step. This is where I break from the path each detail in their philosophies. The reason is that it is assumed debt can be eliminated in a short enough time period that for the duration of this single step: 1) you stay motivated through, 2) you will be okay with only $1,000 in emergency savings and 3) your vehicle will not need replacing or any other major event you would have needed to prepare for occur (i.e. medical). While I still believe in the concept of working towards becoming debt free, I need steps that are going to be meaningful to me. Therefore, instead of one step, I break each debt source into sub-steps. I also include a savings goal with each, thereby allowing myself to take bites at that as well. Finally, I add an allowance to each goal for a small reward. I feel like it's important to celebrate the accomplishment and take a moment to relax a bit. If you set aside a specific amount as part of your savings goal then you won't be blowing your budget to taking a set back to go off and have a little fun. If your debt is on the lesser end and can be paid off in a shorter time frame as is assumed by the advisers, then I completely recommend following them precisely. However, if your time frame is more extended then I believe making adjustments is appropriate. Just make sure you keep taking steps and keep taking debt down one bite at a time!

   

        Because I'm a visual person I like to have charts and pictures in front of me showing me the progress. I created two sheets to do this for me. The first is of all my sub-steps with their goals, Bible verse to focus on, and the reward clearly written. The second is a graph that I can fill in as I work towards accomplishing that single sub-step. It's encouraging to me to color in that chart and see progress being made. Two generic sheets are provided below and as with all the sheets provided in this series, feel free to print them off and make them your own. 

Financial Goals Printable

Current Goal Printable

         Homemaking appears like an insecure move to make in a society that sustains on two-income households and has a tendency of a variable economic state. Yet, our greatest security isn't in two-incomes or the economy, but in our restriction of obligating our income to multiple lenders. How do we protect against the "what ifs?" I believe it's by untying ourselves from the burden of debt. If we weren't so tied up in our financial security due to our insecurity from debt, then imagine the impact that could be had by using those funds to love and serve God and others to a greater extent. 

     
Up next we'll discuss Insurance and Savings. Plus, the giveaway will begin! :)

*Note: I’m not an affiliate of any kind with The Lampo Group, Inc. or Thomas Nelson publishing. These materials were given to me by The Lampo Group,Inc. and it was agreed upon that they may be offered as a giveaway.  

Please feel free to leave any tips you may have in the comment section below. This is simply how I've come to work with finances, but I'd be interested to know of other ways as well. :)

Linked to: Time-Warp Wife, Homestead Revival, Thankful Homemaker, Growing Home, Women Living Well

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Money Management: Part 3

      We're continuing in our Money Management Series. If you missed the previous entries, then read Part 1: Introduction and Part 2: Budgeting and Tracking. Reminder: at the end of the month, The Lampo Group, inc. (Dave Ramey’s company) has kindly offered the book The Total Money Makeover and Deluxe Envelope System to be shared through a giveaway* here at Reviving Homemaking! 

Spending Averages

     Now that you know where your money is going, you can determine where you want it to go. There are plenty of recommended category percentages available from various sources and though these are good guides you’ll need to make adjustments for what is suitable for your family. For example, for my husband and I the recommended vehicle allowance (including gas) is inadequate because we commute to work, church, and many other places we like to visit. Our housing costs, however, are lower because we live outside the big city. So, make the guidelines your own. To do this I recommend keeping a sheet of averages for certain categories. Some bills and expenses vary month to month and so it can be a challenge to determine precisely what is needed. Therefore, record each month’s amount and then take the average. What’s great about doing it this way is that some months will be less than the average amount giving you an excess that you can use during the months that are higher. This isn’t an excuse to allow it to go higher; this is a safety put in place so that when the heating/cooling bill of mid winter/summer arrive you’re prepared with the excess collected during the milder spring and fall seasons. This average also serves as your bar to be under each month as you explore frugal ways to do so.

Category Averages Printable

Allocation

      Now that you have a better idea as to where you’re money needs to go each month, it’s time to assign it to a purpose. Income allocation is taking your total income and dividing it into categories (aka “envelopes"). Write down every category and subcategory you will need. It may be something that is spent on monthly, or it may be something that needs to exist to build so that periodic expenses are covered. The point is to put a purpose to your money so that you can be better prepared to pay (or save!) when that time comes.

      Both Crown Financial and Dave Ramsey have their own types of allocation systems. Dave Ramsey uses a cash-based envelopesystem. Crown also uses an envelope system but it’s an electronic version. Both promote the same idea of allocation and budgeting/spending plan. I've used both of these resources, and can highly recommend either of them!

Income Allocation Printable

Bill Schedule

       Determining how much to put into a category also depends on when your bills are due and how often you get paid. Don’t play the game of trying to keep up with and send each bill when it’s due. Chances are there will come a time when life gets stressful and the due date slips your mind or something else gets in the way causing you to miss or be late with the payment. Start by writing in order the due dates of your bills. Next, determine which ones fall in between which paychecks. For instance, my husband gets paid twice a month on the 15th and 30th. Therefore, I have one group of bills marked to be due between the 16th-30th that I pay on the 16th. I have another set due the 31st-15th that are paid on the 31st/1st. I have only two moments in the month in which I must pull out the allocation sheet, account sign-ons, checkbook, and stamps. The rest of the time I never have to worry about what’s coming up to be paid or if I’ve paid it. (The other advantage is that you’ll be able to know if you haven’t received a statement for some reason and need to follow up. You should always get a bill, but if something crazy were to happen then you can be the proud responsible party here).

       Let’s assume this bimonthly pay frequency I mentioned above to discuss reserving funds to cover everything without ever feeling drained one pay period over another. It may be the case, as it is with ours, that you have just a couple of bills due during one pay period and then everything else due in the other. I’ve seen it many times in which an individual relaxes during the first lighter period and then scrapes by during the second. Again, you know these expenses will occur and so be prepared. Using our bimonthly example, for the paycheck on the 15th you will put half of the amount of the bills due for the month aside, and then the same again on the 30th. For instance, let's say housing payment is $700 a month and due on the first of the month and your paycheck schedule is on the 15th and 30th. So, on the 15th you'll set aside half of the amount ($350). On the 30th, the final portion is set aside ($350) and then the total bill is paid.  All required bill payments are handled in this fashion. In doing it this way, you’re spreading everything out instead of playing feast or famine. It’s simply thinking ahead and being prepared. 

Payments Schedule Printable

Up next we'll discuss Debt (with even more handy forms)

*Note: I’m not an affiliate of any kind with The Lampo Group, Inc. or Thomas Nelson publishing. These materials were given to me by The Lampo Group,Inc. and it was agreed upon that they may be offered as a giveaway.  

Please feel free to leave any tips you may have in the comment section below. This is simply how I've come to work with finances, but I'd be interested to know of other ways as well. :)

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