Money: 5 Days to Budget Breakthrough
Need to get your money back on track? Each day this week I’m sharing one step you can take to start gaining control of your finances. Follow along, take the action steps and find your budget breakthrough! [Click here to read all the Budget Breakthrough posts.]
Day 4: Plan your paycheck
Today’s challenge is to make a specific plan for your next paycheck. Here’s a look at what we do:
1. Record direct deposit amount in the checkbook register and add this amount to the current balance to get our new balance.
2. On a post-it note, write the new checkbook balance and subtract money needed for basic necessities for this pay period (1 week) from the balance:
groceries* ($125)
non-food items* ($20)
gas for the car ($80)
small “cushion” to avoid overdrafts ($20 in our case, you may need more)
[This $245 stays in the primary account.]
3. Transfer remaining money to our second account (read more here) and update category totals for that account. I have divided the amount of each of our monthly bills by four so I know the amount we need to deduct from each paycheck to be able to pay each bill when it is due.
4. Pay current bills due (water bill $60) from the second account.
If money is left over once these minimum needs are met, we can decide to spend it on items like eating out, clothing, etc.
*I stop by the ATM on my way to do my shopping and take the $125 grocery money and the $20 non-food money out in cash.
You obviously don’t have to do what I do, but you do need to find a method that works for you. Every dollar from every paycheck needs a “job” (a designated way to spend or save it) so you don’t just blow your money because you see it sitting in your account. If you want to order pizza for dinner rather than cooking, plan the amount you will spend beforehand. If your son needs new shoes, set aside a specific amount to spend from this paycheck and stick to that amount.
Directing each dollar from your pay to a specific purpose will bring you peace and enable you to take control of your finances.
How are you doing with the challenges this week? Leave a comment. 🙂
[Click here for Day 5 of Budget Breakthrough!]
You May Also Enjoy:
I know someone has asked this question before and you have probably answered it also but I am desperate and need help. I have my budget all planned out with the help you have given and some information from another site but I am totally lost on how to fund these accounts without and still pay my bills. My husband gets paid weekly and I get paid monthly. We are really in a financial fix and I am struggling to make ends meet paycheck to paycheck. We have adequate money to pay the bills (but we do have to quit smoking, which I am more than ready to do) there will just not be anything left over for extras. Three of our payments take all or a little more than one of his paychecks leaving us struggling to keep gas and grocery money on hand ( which most of the time we short ourselves on bill money. Help I am so tired of this roller coaster ride and there is no peace for this mom not to mention a newly diagnosed ADD five year old that keeps me in a tizzy when it comes to discipline. Any help you can give me would be greatly appreciated. Love your site and all your advice. Keep people like me in your prayers and in your determination to help us, thank GOD for people like you. Kim G
Hi Kimberly–I’m sorry that you are in such a difficult position. This post has some ideas for getting cash quickly to get started with the second account. You can also watch my How to Live on Less Video Series here. Hope that helps!
I just wanted to quickly tell you that I spent an hour or two this morning actually DOING your 4 out of 5 steps to Budget Breakthrough. I will not know how it works for us until we use it for a month or 3, but I am willing to try. We have used an online budget system in the past, but it really only helped us to see (in hindsight) where our money had gone, instead of “giving every dollar a job” like your idea does, and I think I see the value in that. Thank you so so much for the effort you put into helping us and many others get to a better place financially.
You are very welcome Bethany and I am so excited to hear how it works for you. Good for you for taking the initiative to do the work! 🙂