Paying Bills- A reality check

When we have money, I spend it. I usually don't just go blow it, but spend it on what I call "high priority wants" that I have been putting off because the budget is tight. The problem is sometimes we have money in the checking that really needs to be saved for bills and needs later in the month. My husband gets the larger part of his pay once a month, so this makes cash management even harder for me. When he gets his "big check" I feel like I have the money to spend. Many months we have found ourselves scraping through because we didn't keep enough money back to pay "needs" later in the month.

Over the past year, I have tried some different ideas. This is what has worked best for me. When he gets paid (big or little checks) I sit down with all the bills. I put them in order by date. Then I schedule them all by their due date (even the ones that aren't due yet or I don't have the money for yet) with electronic bill pay. (If you don't use electronic bill pay, just write out all the checks. It will accomplish the same thing.) Then enter them into Quicken, changing the enter date to match the date it will come out of the bank.

By doing this I have an accurate picture in Quicken of where we are for the month. For example, this week Tim got his first "big check" of the season. It was larger than we were expecting, and I felt like spending! I didn't go crazy but the purse strings did loosen a bit. This is ok, if we really have the money to spend, but did we? I was avoiding sitting down with the bills, and receipts because honestly, I didn't want to know where we really were. Another tip PAY THE BILLS AND ENTER THE RECEIPTS IMMEDIATELY! Last night, I finally sat down with them. It wasn't horrible, we didn't blow it, but things are still tighter than I was expecting. It was a needed reality check.

By handling the bills this way, I also have to keep a close eye on the checking account. I have scheduled bills before the money has actually come in. This may seem like a big negative, but actually I like it, because it forces me to pay attention to the finances. If money doesn't come in as expected or some other bill comes up, it is very easy to go in and change my scheduled payments. I rarely have to do this though, because I am more aware of what is going on in our cash flow.

It is a big mind game to convince myself of the reality of our finances! Enter receipts right away. Pay bills on pay day and schedule all the bills for the month.

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Paying Bills- A reality check + work