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Do you have a hard time paying your bills each month? You need to try THIS method! Learn how to get ahead of your expenses and live off your previous months expenses
Reasons why you should Get Ahead of your Expenses
- You know exactly how much you can budget and spend for the month
- If your income is unpredictable, this helps with predictability of budget
- Know if you have extra money to spend for extra debt pay off, into savings, or pleasure
- Start learning to live within your means/what you earn
- No unexpected surprises that you didn’t have money for
One of the BIGGEST reasons I switched to budgeting a month ahead was because I work sporadic hours on the weekends. I used to plan $400 a month on top of my husbands income… but… my contributions have been getting less and less as life has been getting busier. The problem was, our budget still was planning on the extra $400 I was making… Only now it’s $100-400.
Each month we were going negative from our income, even though we were technically keeping to our budget.
NOW since I have my budget already planned for what we made LAST month we stick to it much better!
How to Get Ahead of Your Expenses
First write down what your take home income was last month. ($2500). Then look at what your total budgeted expenses were last month ($2450). If your budged expenses are LESS than your income from previous month, then keep with the budget. Place the extra money into savings.
I think it’s important to think of savings as important as paying bills.
If your budgeted expenses are MORE than your income from previous month, then you need to make some changes.
DO NOT change your original budget! Just make specific category changes.
Income for January $2615. Total Budgeted Income $2727. That’s -$112 I don’t have money for in January’s’ Budget. On my budget in my “Other Categories” I have Date $70, Home Improvement $50, Childrens’ $80, Pleasure $30, Other Expenses $200.
In the January column I am going to CHANGE Childrens’ to $40 (I know that covers one box of diapers and I won’t need to buy clothing this month), Home Improvement to $20 (it’s January so it’s too cold to be doing our outside home improvement projects), and Date to $28 (well go to Costco and have some cheap dates). This will cover for my lack of $112.
Things to think about
What are some areas you can cut? Can you cut your food budget down? Try eating down your pantry or extra food storage items. Make less trips out to save on gas and cut that down? What about home improvement fund for the month. Can you take that out complete, and focus on smaller projects that you already have the supplies for? Take out your Date budget and go on some free dates.
try to cut down a little bit in a lot of areas to make up for the LESS cash you made.
Only cut items that are not NEEDS or bills! If you don’t pay those, you will be going into MORE debt! Cut the items that are more wants.
How to Apply It
The BEST way to start this method is have have an extra full months worth of money to start with. Then, you will live off that. The second month on the system, you will start living off the previous months expenses.
We did not have $2500 laying around to start with. But, we still keep to this method to make sure you only spend what we spent LAST month!
This method has helped us stay in budget and not go over with our sporadic income.
Before, if we went over budget we would have to play catch up whenever we got an extra pay check, instead of putting it towards savings.
Not every month is perfect, but being aware of what we made last month, to focus on this month helps us be aware of the little changes we need to make each month.
I challenge you to get a month ahead of your expenses and try to live off what you made last month, then let me know how it goes below!