Budgeting baby steps

Hey ya’ll!

I am adjusting to the career change and am loving actually enjoying my work. If you missed what I’m doing now, check out our website-which I got to create: marbellainc.com. It helps that I get to take my son to the office every once in a while. It actually works out. A couple of weeks ago we had clients bring their son in who is close in age to mine and they played together while we discussed material and edging selections for their counters. So much fun!

Anyway, I got sidetracked. Back to the topic at hand. I am adding a category to my blog where I can share what works for us with “budgeting”. I have always managed the finances for our family, but up until I quit my “real” job managing our finances consisted of making sure the bills were paid on time.

Now that I’ve quit my “real job” and have taken a pretty substantial pay cut. I have been forced to re-evaluate our finances. Honestly, I need to get us on a budget. The problem is that I can’t stand budgets. Every attempt I have made at getting on a budget in the past has failed miserably. So, I am taking a different approach. I am trying different methods and seeing what works for us. I wouldn’t call it a budget at this point, lets just say that I’m moving us toward a financial plan.

Anyway, the first step that I have taken is to try the “half payment method”. Where you take half of each bill out of each paycheck and set it aside so that you don’t get hit with say your car payment of $300 out of one $600 paycheck. But, I get paid every week, so I changed it to the “fourth payment method”. So out of each paycheck I set aside one fourth of my monthly bills.

Here is a visual:

Paycheck 1: $500

One fourth of car payment: $100

Left over from Paycheck 1: $400

This is just an example, in reality you would of course do one fourth of all your bills. But, as you can see, you have $400 left after after paycheck 1, whereas if you paid your entire car payment out of paycheck 1, you would have $100 left for the week.

Let me explain how I make this work for us. I created an extra checking account and named it “bills”. Every week when I get paid I deposit my check into my main account. I then immediately transfer a fourth of my monthly bills payment into my “bills” account. That leaves me enough for gas and groceries. I factor in the automatic transfers to my Roth IRA and my son’s college fund as bills so it is covered and I don’t come up short. *Make savings automatic/treat it like a bill*. Right now I move the money for a bill back to my main account to pay it because most everything is auto-pay and I don’t want to have to mess with changing which account it comes from. But, one day when I’m feeling especially productive, I will change all the payments so they come out of the “bills” account. Currently, since the hubs is overseas, he does things his way. Which is less than ideal, because I married a spender. But when he gets home, I will get him on board with the half-fourth payment method.

Just FYI.  We bank with USAA, and they make it super easy to add new accounts in your online profile and to move funds around among your accounts.

So far this modified half payment method is working really well for me. I have a week every month where the bulk of my bills come out, so now that week isn’t as much of a stressor as it used to be. I also no longer spend money that should have gone to a bill because it has already been taken out of my account. Having to “budget” the funds has been a big change and really tough; it has also made me regret buying that brand new Q5 last year. But, it has been worth it to have a flexible schedule and spend more time with my kid.

My husband’s PCS (permanent change of station) overseas has also allowed us to save up enough to pay off his Camaro at the end of December, but that’s a post for another day.

What budgeting methods have worked for your family?

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