- How to Get One Month Ahead of Your Bills in Less Than 30 Days
- When is the Right Time to Get Ahead of Your Bills?
- The Simple Concept to Get One Month Ahead of Your Bills
- How to Get Cash Quick for Your Savings
- What do you think?
- How to Get Your Finances in Order
- Consider Your Long-Term Goals
- Create a Budget
- Try to Save Up
- Pay Down Debt
- Spend Consciously
- Is getting organized financially challenging for you or do you have a system in place? We’d love to hear in the comments below!
- Get Your Finances in Order in 10 Easy Steps | legalzoom.com
- Top Saving Mistakes to Avoid
- The Tax Friendliest Places to Live in the US
- Top Ten Strangest Tax Write-Offs
- How To Budget: 4 Easy Steps To Get You Started
- Tracking spending manually is pointless
- What is a simple spending plan?
- Step 1: Track your spending automatically
- So should you use credit or debit?
- Use Budgeting Apps
- Step 2: Know your monthly “nut”
- Then there’s the issue of having NO leftover money
- Step 3: Put your money on autopilot
- Step 4: Spend the rest without worry using a spending allowance
- Read more:
How to Get One Month Ahead of Your Bills in Less Than 30 Days
The bills keep on coming! Unless you are an extreme minimalist who lives off your own land and built your own self-sufficient solar energy system, you are pretty much guaranteed every single month to have to pay up.
And even if you are such a minimalist, you are still going to have to pay land taxes.
Though, that type of self-sustaining life does sound a bit nice. Doesn’t it?
My point is, for the majority of us, we have to pay the bills! This mandatory task can become extremely stressful when you are living paycheck-to-paycheck.
The solution our family has found most helpful is to get one month ahead of your bills. This process can be very simple and opens so many doors for living a financially free life!
Since we accomplished this savings goal, our family is able to easily set up a cash envelope system and start doing monthly grocery shopping.
These two habits have allowed us to set a budget that we can actually stick to every month. As a result, has helped us to pay off over $20,000 in debt and we are now in the process of getting ready to buy our first home.
You can check out our monthly budget updates to see how all the numbers on how we manage our one income budget and make it work while living in one of the most expensive cities in the US.
All of which would not have been possible if we didn’t get ahead of our bills.
When is the Right Time to Get Ahead of Your Bills?
I cautiously say that setting the goal to get one month ahead of your bills should take priority over paying off debt. The only reason I hesitate to mention this is that I don’t want you to lose focus. Get one month ahead of your bills and then immediately resume your debt free path!
Whether it is debt, retirement, or house hunting, it doesn’t matter what your financial goal is, an unexpected expense can completely derail you and cause a much longer course to get back in line.
But here is a giant BUT, I would still recommend building your $1,000 emergency fund before trying to get one month ahead.
It All Starts With a Solid Budget
Before we go any further, you first need to make sure that you have a budget that actually works for your family.
I know you have probably “tried” setting a budget before and for one reason or another, it doesn’t seem to stick. Hello overdraft fees!
Coming from a lady who is all to familiar with overdraft fees, I know how frustrating that can be!
Can I show you how to set a budget that actually works for your specific family? Just click this link to see how our family finally figured it out and how you can easily customize your own budget in just one night!
When it comes to getting one month ahead of your bills in relation to your budget, the focus needs to be minimizing your expenses and savings. This is going to free up your cash so you can put your savings temporarily towards your next months bills.
The Simple Concept to Get One Month Ahead of Your Bills
The simple idea behind getting ahead of your bills is to have that entire month’s worth of expenses saved up now. You will now be living off of last month’s income, rather then living day-to-day.
Now that you have your budget set in place and now know exactly how much cash you have to work with, set a temporary goal to put that money towards building a savings fund that covers an entire month’s worth of bills.
Once you have this savings in place, then immediately resume your long-term savings goals or debt repayment plan.
How to Get Cash Quick for Your Savings
If after setting your budget you don’t have a bunch of cash floating around waiting for direction. Ha! how nice would that be?
Here are some suggestions on how to get extra cash in the next 30 days.
- Get the family on board for a no spend month.
- Use your hobbies to make money from a side hustle (I currently have a seriously awesome “side hustle list” in the works. With ideas you haven’t heard before but can be done by any stay at home mom. So make sure you follow me on Instagram so you don’t miss when they come out)
- De-clutter your home and sell any unneeded items.
Once you start paying attention to these three categories and brainstorming ideas on how to make them work in your family, you will quickly start seeing opportunities to build your “month ahead savings”!
What do you think?
Are you ready to get ahead of your bills? What questions do you have? Let me know down in the comments below and I can help you work through it!
Thanks for stopping in and I will talk to you soon! xoxo
How to Get Your Finances in Order
If you feel overwhelmed by your finances, you’re certainly not alone! Statistics show show that many of us are surprised by our bills and approximately nine person of our income on interest payments every year.
Research also indicates that the majority of Amercans don’t have long-term financial goals or savings for emergency expenses.
It’s not surprising then, that nearly 50 percent of Americans are concerned about their financial wellbeing!
The good news, though, is that getting on track financially is possible. Developing a financial plan can help you simplify your income and expenses—and make managing them as seamless as possible.
Consider Your Long-Term Goals
Putting your long-term goals down onto paper is the best first-step in creating financial order. Think carefully for a minute about your goals.
Do you hope to buy a house in a few years? Would you to start a business or a side venture? Travel the world? Saving and working towards a goal is much easier than simply saving for an unknown reason.
If you are visually motivated, you might even consider building a visual board or savings progress thermometer to keep it real.
Create a Budget
Next, it’s time to make a budget. Most people dread the idea of a budget because it conjures up images of a restrictive plan that will limit their enjoyment of life. But when done properly, a budget isn’t something that’s designed to destroy your good times, instead, it’s a tool that will put you in charge of your finances; which is a place that we all want to be.
A budget simply maps out your spending from the month, and enables you to create a spending plan so you know exactly what’s going where. From there, you can make informed decisions on your income and expenses, allocating funds as-needed to different areas.
In the end, you’ll get a clear picture of your income and outgoings, and will be able to know at a glance, where your money’s going.
Try to Save Up
We all would to spend less and save more, but being able to follow through with this is another story.
According to NerdWallet, our increasing indebtedness is due to the fact that cost of living consistently outpaces income growth.
While household income levels have increased by 28 percent in the past 13 years, the cost of living increased by 30 percent. This, of course, means that it’s increasingly difficult to save.
To help combat this, consider making small changes in your life to help pad your savings account a little more each month. Start small, cancel subscriptions you don’t use, pack a lunch instead of eating out, or think of budget-friendly ways to enjoy time with friends.
Regardless of how small or how large these savings may be, be sure to direct that money that you would have otherwise spent into your savings accounts. Or, better yet, set up a recurring payment to automatically transfer into your savings account from your checking after you get paid.
You’ll be surprised at how quickly it adds up!
Pay Down Debt
With the average American credit card debt totaling to $16,245, there’s a good chance that most of us could stand to pay down some of our debt. If you feel that debt is looming over your life, and would to see that balance get lower, there’s a lot that you can do to maximize your strategy.
First, try to get rid of any credit cards with a high-interest rate by prioritizing paying them off first. Or, consider paying off the smaller debts in-full first, then snowballing the extra money that you’ll have into tackling larger debts.
This doesn’t mean you have to go without, or sacrifice important things, but it just means being conscious about what you’re spending, and why.
Finally, it’s important to avoid falling into the guilt trap, where we berate ourselves for having credit card debt or not as much as you hoped in your savings account. Instead, it’s far better to ensure that you plan and budget from a place of positivity.
The best approach by far isn’t punishing yourself by denying enjoyable little purchases that bring you happiness or avoiding spending time with friends because going out involves money.
Instead, it’s about setting goals, and choosing how you spend your money, consciously.
* * *
Getting organized is challenging, and finances can be too! But at the end of the day, gaining control of your finances is a task that’s worth doing.
Being in the driver’s seat will give you a tremendous sense of freedom and empower you to reach those big-picture goals that would otherwise have only been dreams.
In the end, it’ll make you happier, help you feel less stress, and enable you to go about your daily life without the constant pressure of finances. Remember: it’s all about taking steps, even small steps, in the right direction; and consciously working towards achieving your goals.
In our blog series this month we’ll be looking at tips to getting organized, and outlining steps that you can follow to bring order into different areas of your life. If you’d to make this the season for change, then be sure to stay tuned for upcoming posts!
Is getting organized financially challenging for you or do you have a system in place? We’d love to hear in the comments below!
Get Your Finances in Order in 10 Easy Steps | legalzoom.com
Get Your Finances in Order in 10 Easy Steps by Heleigh Bostwick
Take control of your finances in 2009! Getting your finances in order is important, and it doesn't have to be difficult and intimidating. Follow these simple steps to get your finances on the right track.
by Heleigh Bostwick
updated February 04, 2020 · 4min read
Getting your finances in order is always a good thing; however, most of us don't do it until we're motivated by a life event an upcoming wedding, the birth of a baby, a divorce, a financial audit, or a natural disaster. Fortunately, getting your finances in order is not a difficult task, especially if you follow these 10 steps.
1. Make a Commitment
The first thing that you need to do is to make a commitment to get your finances in order and be ready to follow through.
2. Order a Credit Report
Most people don't give their credit reports a second thought until they are denied credit. Because your credit history plays such a big role in so many areas of life, credit reports should be reviewed at least once a year.
LegalZoom's trusted partner CreditReport.com offers a free 30 day trial: Free Credit Report and Credit Score. Federal legislation also requires the three large credit bureaus to provide free yearly reports. Visit www.
3. Gather Financial Paperwork
When you gather your financial paperwork, you should include credit card, phone, and utility bills, bank statements, insurance and mortgage payments, and any other financial debts and obligations that you are required to pay on a monthly or yearly basis. Determine what your financial obligations are so that you can make arrangements to pay down debt and/or reduce your overhead if necessary.
4. Organize Financial Documents
Once you've gathered all your financial documents, sort them by name and place them into separate file folders labeled with the name of the company and the year. For example, XYZ Utility 2008. Keep tax returns in their own folders and label them the same way: Tax Year 2008 and so on.
5. Analyze Your Insurance Coverage
No one s to think disasters fires, floods, tornadoes, and hurricanes will strike, but sometimes they do.
That's why it's important to make sure you have homeowner's insurance if you own a home, or renter's insurance if you rent (it's inexpensive and well worth it).
Remember that flood and disaster coverage aren't always included in regular policies, so talk to your insurance agent to make sure you have the right disaster coverage for where you live.
Life insurance might be offered through your place of employment, but if it's not, consider speaking to your insurance agent to determine whether or not you need it. Life insurance is also a good way to ensure your debts are covered should anything happen to you.
6. Make a Will
Making a last will is especially important if you have children; it enables you to name guardians to watch over them. A last will or living trust is also critical if you own significant or complicated assets. You can create a last will at LegalZoom for as little as $69.
7. Create a Budget and Stick to It
Creating a budget is a critical step in getting your finances in order and it's not difficult to do. Sticking to it is another matter! In a notebook or spreadsheet, write down all your fixed monthly expenses. Next, write down your other “non-fixed” expenses such as meals out, entertainment, clothing, and other discretionary purchases.
Writing it down and seeing it on paper helps you to understand where your money goes each month—and where you can cut back. Once you've made a budget, you have to stick to it. Every time you buy something, write down the amount and what you bought. Compare your actual spending to your budget to see where you're getting off track.
You can also check out budgeting and expense-tracking software Microsoft Money.
8. Reduce Your Debt
Another difficult-but-necessary step in getting your finances in order is consolidating and paying down debt. You should pay at least double the minimum payment plus the finance charge every month.
Transfer balances to one or two cards with low APRs to help you keep track of credit card debt. Destroy or freeze your other credit cards so you don't use them. Use cash or debit cards instead of credit for all purchases.
If you don't have the cash on hand, don't buy it.
9. Set Up an Emergency Fund
We all know the importance of having 2 to 3 months of income on hand in case of emergency, but in tight economic times it can be difficult to do. If you're really short on cash, try putting every five-dollar bill you get into a box, or even emptying all your change into a jar at the end of the day.
Tricks these do work and they will add up over time. Better yet, write yourself a check—even if it's only $25 or $50—every time you get paid and place it in a special account.
Another alternative is to take a chunk of money your savings and invest it in a Certificate of Deposit (CD) with a penalty for early withdrawal.
10. Safekeeping for Financial Documents
Finally, real estate deeds, trusts, wills, 401ks, IRAs, and other important financial documents should be kept in a safe place that a trusted friend, attorney, or family member knows about. Also make copies of driver's licenses, passports, and credit cards in case of loss.
Get legal help with financial mattersGET STARTED
Top Saving Mistakes to Avoid
When there are loans to be paid and birthday gifts to be purchased, it may seem saving money is your last priority. But in the long run, regularly contributing to your financial security will pay off.
The Tax Friendliest Places to Live in the US
There are so many to choose living in a particular area. Certainly, warm climate, exceptional school systems, or enjoyable nightlife, may rank high on your list. But what about tax-friendliness? Find out where your favorite city ranks on the list?
Other Tax Topics
Top Ten Strangest Tax Write-Offs
Throughout the year, many taxpayers keep receipts of charitable donations, business expenses, and even vehicle mileage, for a lucrative tax write-off in April. However, many Americans may not realize that, in certain situations, breeding animals, breast augmentation, and even body can equate to a tax write-off.
How To Budget: 4 Easy Steps To Get You Started
Old-school personal finance books tell you that if you just create a budget and stick to it, then—POOF!—all your money problems will be solved. But anybody who has ever tried budgeting knows it’s complete crap.
In fact, only one every three Americans creates a formal budget every month.
You know you should budget, but you also know you’re not really going to do it. Learning how to budget isn’t the problem, and here’s why:
And even if you write down every dollar you spend for 30 days (which, done manually, is a complete pain in the ass), you’re still human.
Over the past five-plus years, I’ve experimented a lot with budgets. I’ve set monthly budgets, annual budgets, and weekly budgets.
I’ve tracked my spending using paper and pencil, spreadsheets, and apps Mint.com. And through this I’ve learned something:
Tracking spending manually is pointless
I never keep up. And I’m a financial blogger—a total nerd about this stuff.
If I can’t do it, I don’t expect you to. Monthly budgets are useless because we underestimate our monthly expenses.
There are some things you just have to pay for every month, such as housing, transportation, utilities, food, and debt payments.
Then there are things you pay for less than every month, car repairs, home improvements, trips and vacations, holiday gifts, and insurance payments. For you, these less predictable expenses may only be 10% or so of your total spending. But for me (especially after becoming a homeowner) they’ve crept up to more 30% (home repairs aren’t cheap).
And here’s what this means. Accounting for, and “pre-spending,” every dollar you make can be a financial mistake.
If I take my annual take-home pay, divide it by 12, and proceed to spend that amount every month, I’m going to be in trouble when that unexpected car repair comes up, or it’s December and I have to do my holiday shopping.
So what you need to do is stop obsessing over the detailed, track-every-penny budgets you’ve always been told were the solution and instead, you need to implement a simple spending plan.
Luckily, technology can give you a hand with that. Empower is a mobile banking app that monitors your spending across all connected accounts, letting you keep an eye on your spending without having to stress about it.
You can set spending limits by category for the week or the month and get alerts when you’re close to going over.
Gradually, you’ll get a more realistic picture of where your money goes so you can set more achievable goals and improve your spending habits.
Best of all, Empower can automatically move small amounts of money over into savings¹ so that when an emergency pops up, you’re ready for it.
All you need to do is tell Empower how much you’d to save, ideally every week, and they’ll do the rest.
And no need to worry about moving too much money over to savings; in weeks where your bills are trending a little higher relative to your income, Empower recognizes that and knows to save less.
¹Banking services provided by nbkc bank, Member FDIC.
What is a simple spending plan?
A simple spending plan is an easy way to budget that helps you save money, get debt, pay your bills on time, and still allows you the freedom to spend money on things you value – within reason of course.
Recently, a funny thing happened to me. I was in the doctor’s office waiting for my physical and I picked up an issue of Money Magazine and randomly turned to a page that actually recommended the same thing: stop budgeting!
As a way to reduce financial stress, the piece recommended to ease off budgeting, saying:
“Money (or its lack) is the nation’s most common source of stress, reports the American Psychological Association. Making a detailed budget — a widely advised fix — only makes things worse, says Cleveland financial planner Kenneth Robinson, a decade of work with clients; the problem is that people hate to think about where they’ll need to cut back.”
In other words, when money is tight, focusing on that fact day in and day out doesn’t do you much good. And the magazine’s fix for the problem is the same as mine: a simple spending plan.
Step 1: Track your spending automatically
Forget about manually tracking every beer and burger. The goal is to set up a system that keeps track of all of your spending electronically without any additional work from you so that you can access it if and when you need to.
You can do this easily by using the single-card method. This is when you use just a single debit or credit card for all of your purchases—or as close to all of them as you can—and let technology do the tracking for you.
One of the best ways technology can help our wallets is by eliminating the need to use cash, and therefore, eliminating the need to keep track of our cash expenses. Now this is counterintuitive to what a lot of old-school financial gurus say about cash helping you spend less.
While that’s partly true, the fact is cash can also get lost and stolen. And, more importantly, cash is on the way out.
Electronic payments are here, it or not, and the times you need cash (for anything) over a debit or credit card are fewer and fewer. But the best thing about using a credit or debit card is that you automatically have a record of all of your spending.
So should you use credit or debit?
The age-old question. If you have a tendency to buy things first and figure out how you can pay for them later, stick to a debit card. But if you’re comfortable with a credit line and only charging what you can pay back in full each month, credit cards are more useful than most debit cards for tagging and categorizing your purchases.
With most cards, you can also export your transactions to spreadsheet…which, for the nerds me, is where the fun begins.
Learn more: Find the best credit cards, how to choose the best card for you, and how to use credit cards responsibly
If a single card isn’t for you, use a personal finance management tool.
As an alternative to the single-card method, there are personal finance management (PFM) tools. These applications link to your credit and debit cards, aggregate your transactions, and can even categorize them automatically.
You set spending limits, and they can send an email or text when you hit them. These apps are powerful and effective…if, of course, you remember to login occasionally and make sure the categories are right, and view your tallies.
But even if you don’t, that’s OK. The important thing is that data is there if you need it.
Use Budgeting Apps
When it comes to budgeting, technology is on your side. There are apps that can walk you through the process of setting up a budget, then track your progress. Instead of manually evaluating your spending to make sure you stay on track, an app can monitor your spending and deliver the information to you.
One of our favorite budgeting apps is You Need A Budget (YNAB), which connects to all your financial accounts to help you monitor your spending.
With goal tracking and financial reports that show you your progress, budgeting suddenly can become fun! You can access your budget from all of your devices and with YNAB’s “four rules” that give every dollar in your budget a job, you won’t fear overspending ever again.
Personal Capital is another great budgeting app to check out. This app is especially useful if you want to add investing to your financial strategy.
As with YNAB, you’ll link your financial accounts to Personal Capital and wait for the app to start gathering data from the money you’re spending.
But while you’re budgeting and managing your money, you can also take advantage of Personal Capital’s expert advice to build an investment portfolio.
Step 2: Know your monthly “nut”
Setting up a personal finance app or downloading all of your credit card transactions is great for historical analysis of where all of your money goes. Looking forward, however, this data is less important.
What you need to know are your fixed monthly expenses. Things :
- Your rent or mortgage
- Utilities and insurance
- Loan payments (student, auto, etc.)
- Minimum credit card payments
- Desired savings, investments, or additional debt payments*
That last one is important. It’s vital that you calculate how much you want to save, invest, or use to pay down debt first.
To find what’s left, do the following:
- Total your fixed monthly expenses (your Nut).
- Figure out your net (take-home) pay, per month.
- Subtract your Nut from your take-home pay.
This is what’s left to spend, also called your spending allowance (discussed below). You can spend this on whatever: food, gas, beer, travel.
Here’s a snapshot of our simplified version (which you’ll receive when you join our free weekly newsletter group):
Of course, if something big happens, you may need to spend money on that and have less for fun stuff. That sucks, but it’s also why you should have a bank account buffer™.
Then there’s the issue of having NO leftover money
What do you do then?
OK. Deep breath.
If money is tight, it’s ly there won’t be much (or any) left to spend after you’ve laid out your necessary monthly expenses and what you hope to save. In the short-term, you can reduce–but not eliminate–your savings goals while at the same time trimming spending.
Forget about trying to trim your food budget by $25. Look at big places you can save, :
- Getting a roommate
- Refinancing your mortgage
- Earning more money
Cutting little things gets you a little bit of money. Making big changes gets you a lot of money.
Step 3: Put your money on autopilot
I first read about putting my money on autopilot over 10 years ago in The Automatic Millionaire by David Bach. The entire book is devoted to setting up automated systems to manage and invest your money.
This does two glorious things:
- It eliminates worry. You stop wasting time thinking about stupid things “Did I pay the electric bill this month?”
- It protects you from yourself. Automated finances make it harder for you to sabotage your money. No more late credit card payments (and the associated fees and damage to your credit score). No more skipped IRA contributions. And on and on.
The idea of automating your finances isn’t new. In fact, another writer who has taken the idea of automated finances to the next level is behavioral finance guru Ramit Sethi.
He lays out simple plans for automating your personal finances on both his blog, I Will Teach You To Be Rich, and in his book by the same name. He’s a vocal advocate of what so many other financial “experts” for some reason refuse to acknowledge.
Our generation doesn’t want people our parents’ age telling us to just “set up a budget” and “cut back on lattes”…the latter a direct jab at Bach, who trademarked the term “Latte Factor” to describe how a daily coffee habit can eat into long-term wealth. Instead, we want to be able to spend our money consciously, even when that includes things we want, a latte.
And the key to that is automation.
Further reading: Put Your Money On Autopilot
Step 4: Spend the rest without worry using a spending allowance
The amount of money that you have left after your monthly expenses and savings is what I call your spending allowance. It’s how much you can spend this month (on whatever you want) without worrying.
Using whatever method you’ve set up for autopilot spend tracking, you can keep a simple eye on how much of your spending allowance you’ve used for this month. For example, by setting up a goal in Mint or using the single-card method for all of your day-to-day spending.
This is what I do: if my family’s spending allowance is $2,500 in a month, I can eye our credit card balance throughout the month. If it reaches $2,000 too far before the end of the month, for example, I know it’s time to ramp down the spending a bit.
This is a lot to digest. But here are the key themes from this article:
- Budgets are overrated. They create stress and we don’t stick with them.
- All you need is a spending allowance. Instead of tracking dozens of categories of spending, know how much you can spend per month—your spending allowance—after you’ve covered big expenses and savings.
- Forget manual spend tracking. Keep an eye on how much of your spending allowance you’ve spent with Mint or by simply using one credit card for everything you buy. Cash is dead.