Credit crutch

An interesting thought came to me today as I was looking at the calendar this morning (post is a day late).

The reason I was checking it out was because I’ve spent all my budgeted money (plus some) this month. I was trying to decide of I should do groceries today and allocate the spending to May or wait until tomorrow, when it will actually be May.

In the grand scheme it doesn’t really matter but it made me realize that I look at my budget as a monthly sum of money even though I’m paid fortnightly.

I do this because:

  • Having the LOC attached to my chequeing account makes it easy
  • I find it less stressful to budget this way
  • I like paying all my bills and savings within the first week, if I budgeted like I earn I’d have limited funds at the beginning of the month as most of that paycheque would go to bills

None of this is bad as my system works for me, for the last year I’ve consistently spent less than I earned per month. The reason it’s coming up now is because for the first time in years my LOC is in the black. It’s a slightly false black as my entire paycheque is in it. Based on the May budget I outlined for myself I won’t be able to stay in the black much past the 6th.

I suppose I’m also afraid of relapsing into debt. Once I pay off my debt I’d like to start having my pay be deposited into my chequeing account where it will earn interest. I’m afraid seeing my paycheque in it’s entirety might make me a bit reckless, in the sense that I’ll be willing to spend, “Just $5 more for the upgraded version.” It’s that sort of thinking that lands me in trouble at the grocery!

How do you budget? Is it based on when you receive your paycheque?

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12 thoughts on “Credit crutch

  1. My husband gets paid on the last day of every month so we have to budget for the month ahead. I prefer it this way because we can pay our bills and then know what we have left for gas for the vehicles, groceries, savings and misc expenses.

    When it comes to the end of the month there is sometimes the temptation to count grocery money for the next month rather than this month’s expenses. I always make myself count it for the current month and if that means I only have enough to get a few basics, then so be it. I think if I start counting it for the next month, then it will become a habit and I will always end up short of money for the current month and have to count end of month expenses for the next month and it will just snowball.

    

    Liked by 1 person

    1. I like monthly budgeting!
      It is a slippery slope, I did end up buying the groceries and gas yesterday and accounting as if I purchased them today. My thought process was that both are for May. Funny enough I didn’t do this mid-week as it felt too much like fibbing.

      Liked by 1 person

  2. We currently get paid weekly so our budgeting is on a weekly basis (we are on a $140 cash diet for groceries, household expenses and a $20 personal “allowance”) – after setting aside all funds for upcoming bills (and checking for bigger bills in the weeks to come), all the rest goes straight to our debt balance.

    We’ve been chomping away at our debt so we should be done in the next few weeks and then it’ll be a whole new game for us! I like doing the weekly thing because we get to see our progress a lot more often than when it was biweekly.

    Liked by 1 person

    1. that’s so exciting! Congratulations on being debt free soon!
      I tend to revisit my budget weekly to make sure I’m still on track & I’m not dipping into my debt repayment fund though it’s often a bit of a struggle.

      Liked by 1 person

  3. I also get paid fortnightly (I had to goggle that!), so I only budget two weeks at a time. I make sure I only budget with money I have instead of money I’m expecting to have – this has really changed how I approach and view the budget. It also helps me stick to it better.

    Liked by 1 person

    1. When I switched my budget model last year I began doing the monthly budget, I think I was afraid that I would feel pressured for a part of the month and blow it.
      I think it’s time to revisit my habit 🙂

      Like

      1. Yeah, I always struggled with the monthly budget, too. I can’t tell you how many times I’d blow through a category in within the first week or two of the month…but I was also addicted to credit at that time, so my finances as a whole were a complete mess. But I’ve found over the years no matter how good I think my budgeting process is there’s always room for some tinkering. Good luck!

        Liked by 1 person

  4. I budget monthly. I calculate everything into a month (weekly groceries x4, fortnightly rent x2, monthly phone bills x1, yearly insurances /12), and then divide that by however frequently I get paid. So my last job I got paid fortnightly, so pay day I moved $1000 directly into household/savings account to cover living expenses and bills. That way I am putting money aside for bills throughout the year and never have an unexpected bill that I need to dip into my savings for. Then whatever is left is my money, and I decide however much I want to save out of that and it goes straight into a long term savings account, and then what’s left is personal spending money for that fortnight. If you are vigilant and disciplined and move your personal money into savings straight away and pretend it doesn’t exist, maybe you won’t be tempted to upgrade that $5 because it won’t be there in your access bank account 😉

    I do run into trouble in 5 week months where I might need to move money earlier than planned and it creates havoc on my spreadsheets haha, but it all balances out in the end.

    Liked by 1 person

  5. I budget with YNAB. I highly recommend it. One of their rules is to live on last month’s income by allocating all your paychecks you receive in the current month to the next month. This way you live a month ahead. It’s really relieved a lot of stress in my budgeting 🙂

    Liked by 1 person

    1. I remember reading that when Ernie introduced me to YNAB. Thank you for reminding me. My current budget model is similar in that it incorporates Steps 1-3 but I think it may be time to start working on Step 4. I can keep my habit and get rid of my crutch 🙂

      Like

  6. Pingback: It’s all Changed – Saving Without Scrimping

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