Tuesday, September 29, 2009

Budgeting Money

Do you struggle pay the bills? Not because you don’t get paid enough – but all the money seems to disappear before your very eyes?

There is a really easy answer. It’s so simple you won’t quite believe how easy it can be.

I’m not selling anything, in fact I’m not even giving anything away – other than sharing with you a few tips that I have learnt whilst living life in the lean lane for many years.

First thing you need to do – calculate how much your bills really are, from the car registration to the insurance to the electricity bill and even your mobile phone and land rates. Everything that you have to pay on a monthly, fortnightly, monthly, quarterly or yearly basis – write these down on a piece paper, noting when the amounts have to be paid.

Now break these figures down into the same period that you get paid, so if you get paid weekly, divide the monthly due figures by 4.5, if yearly divide by 52. This will bring all figures into line with the pay period.

I get paid weekly
Car Registration $600 per year, therefore $11.54 per week
Car Insurance $700 per year, therefore $13.46 per week
Mobile phone $50 per month, therefore $11.11 per week
Water rates $150 per year, therefore $2.88 per week

This is only part of my costs, but it works out at $38.99 per week, this is the amount of money I need EACH AND EVERY week to pay my bills, without anything else going wrong.

Go to your bank and set up a separate account into which this money is paid into directly from your wages account.

Then use that money to pay the bills when they come in – utilize the pay early discounts and set things up when you receive the bills – so they are automatically paid on the day. That way you don’t have to worry about remembering to do it when the bill is due.

Believe it or not – although it seems hard for the first couple of weeks/months, you will actually have more money and better cash flow because you are not taking chunks out of your regular account to pay the bills!.

It’s easy – do it now – don’t pretend it’s hard. The hardest bit is going to the bank and setting up the 2nd account.

It worked for me and I am still amazed at how much money I really have these days AND I am not worried about the bills AND I am managing to put some money away for a rainy day. That wasn't possible before!

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