Money Management: Tips for Creating a Budget

Woman with Piggy Bank ImageHow many times have you sat down to pay your bills when the paycheck comes in and can’t figure out which ones to pay? When that happens you have to look at everything you have so far and decide which ones are due first and which ones you have enough money to pay. What happens if you get a bill a day or two later and that one needs to be paid right then? You don’t have the money to do that so it will be late.

To prevent this situation from happening the best solution is to take the time to look at all of your bills for the month and decide where you can pay them so it works in your budget and you get them paid on time. Here’s what I do each month.

I gathered all of my bills and on an Excel spreadsheet I documented the monthly payment and the due date. When I was all down I sorted the spreadsheet by due date so it was easier to tell when they were due. Next I looked at the calendar and I made note on the sheet when my paydays were for that month. Then I started moving bills around to each payday, so the bills were paid on time. Next I started calculating how much the total amount was for each payday and then started moving things around again if I was over or under on each payday. The final product allowed me to see what bills were going to be paid with each payday.

When you’re creating your list of bills and paychecks you’ll want to make sure you include groceries and fuel each payday or several times a month. If you like to go out to eat once a week or you like to get coffee every morning before work, you should include those as well. There’s nothing worse than paying all of your bills and not having enough to purchase food or put fuel in your car.

The next step is to create another spreadsheet using the same information from your bills, but this time you’re going to add the total amount you owe for each bill and the interest rate if you have one. The reason for this is if you get a bonus or have money left over at the end of the month you’ll know which bills to pay an additional amount so they get paid off sooner. If all of your bills are paid and you still have money left over you can add more money to the bill with the highest interest rate or the lowest amount owed.

Each month you’ll change your spreadsheet based on the monthly bill you have and when you get paid. If your paydays are always the same, your bills won’t change much, but if your paydays are different you may have to do some rearranging in order for your bills to get paid on time and to avoid late fees. If your due dates don’t work out, call your merchant and ask if it’s possible to change the due date so it works into your budget better. Some will be willing to do this and some may not, but it doesn’t hurt to ask.

Corrie Petersen runs a successful Virtual Assistant business. She is married and has two boys and she loves spending time with her family. Catch up with everything she has going on when you click here to read her mommy blog.

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