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We pre-fund our month’s budget.
That money just goes into savings to wait for next month.
My paychecks also really vary because I don’t always work the same number of hours each week.
That can be problematic.
Here’s what we do.
We try to keep 500’ish in savings. I fund this pot far and beyond what we need. Let’s say our total budget is 4000, I try to fund 4500 into savings each month. This just keeps us on track.
Some months we don’t make 4500, but that’s OK because we have that small cushion in savings. ALSO, because I don’t have babysitting in my monthly budget I put those checks off until the next month in Quicken, and I fund that the next month. Does that make sense? I also keep a cushion of extra money in checking (which is taken out as a “fake” transfer in Quicken so that I think we’re nearing zero, but we’re not really — we don’t have overdraft protection in our account, so I always want to make sure things are paid).
There are some months we make more then the 4500, and I honestly think that’s the hardest part. What to do with “extra” money. I have come up with a plan for that (of course)
Let’s say we make 5500. Giving me 1,000 “extra”
Here’s how the transfers would work:
- 500 into long term savings
- 250 into regular savings (to help us with our cushion)
- 125 into family fun
- 125 into home improvement
You can read more about those accounts in the previous post.
Sometimes when we get extra money (like, a tax return) we will talk about it and perhaps put more in one particular fund. Maybe long term savings if we need more for tuition. Or, this year we’re going to put a larger percentage into family fun as we REALLY want a trip to Disneyland at some point as a “HURRAH” for getting through grad school. Because money should be spent. I’m a HUGE fan of money sitting savings looking pretty, but it’s IN savings in case you need to spend it. 🙂 I also feel like Family Fun allows us to see the fruit of our work. Work isn’t fun unless you’re seeing a little entertainment out of it!
I am aware that pre-funding seems impossible when your paycheck barely stretches month to month but I would make it priority to try to be able to pre-fund. Extra money goes into savings until you can. You can do it, it may just take a while. 🙂 It will feel great when you can!
I hope this little series has been helpful. I’d love to know your thoughts below!
This is the first in my budgeting series. You can read more here.
I also have a post with an example on how to budget right here!
*I am not putting these budget numbers out there to be “woe is me” or “woo-woo look at me! We’re rich!” type feeling. I really think if people were more transparent with their own expenses it might make people re-think what they are doing with theirs. I am sure we spend more and less then many readers on my blog. I hope this is helpful to some of you. I would LOVE to see other people’s. There’s really no reason that our budgets have to be hush-hush. I didn’t give you my social security numbers, or how much we actually make — this is just our goal to spend.
My husband’s company just restructured their payroll schedule. It used to be the first and fifteenth of each month. Now, it’s every other week. Since hours worked vary according to your schedule on any particular week, managing the money has become a real problem. Thank you for this idea. I’m going to use it and save myself some grief!! 🙂
Yes, it totally helps with that type of pay structure!