I have spent many years refining how I take care of my family’s finances. I first started out by paying my bills on the day they were due, thinking I would earn more money in the meantime, while the money sat in the bank. Then, after being charged late fees on bills I had forgotten about, I started to pay them as they came in. Then, after being charged late fees on bills that would “fall through the cracks,” I decided to set up a bill payment system with my bank. After receiving overdraft fees because my wife didn’t know how much was in the bank account when the bills were paid, I set up recurring payments where an equal amount would be taken from our bank account every two weeks, coinciding with my paychecks, to pay all our bills. She now knows exactly how much she has every two weeks to use on fuel and groceries.
Our new program has been the best. All the bills are now on level pay plans with their respective companies. In the case of bills which were already fixed like rent, the truck payment, and internet service, biweekly payments are sent as well. We have not been late since I made that decision. When a bill comes in, I now review it to see if it is already on a recurring payment. If it is not, I immediately pay it. If it is a bill that will come over and again, I set up a new recurring payment on it. About once a quarter, I check all accounts and verify whether I need to make an adjustment to the amount I pay so there aren’t any underpayments or overpayments in large amounts. This method has also helped me to save $25 per paycheck, something that didn’t happen before, which has built to a $1,000 emergency fund. It also allowed us to pay off our credit card years earlier, as well as several other revolving accounts that had “piled up” over time. We now have a few more debts we’re trying to eliminate. Our hope is that in less than a year, we will be debt free.
The difference of each path and pivot I took has made our finances much more manageable and brought more peace into our lives. By having a better management system, I’m able to help others who are going through the problems I learned to get through. I can empathize with them and teach the best way I know how.
I wrote the above in October, 2017. We have since paid off all our debt, except the house we just bought 5 months ago. Even then, we make extra payments on the house to help pay it off sooner, too. This method of paying my bills has made the biggest difference in my family's finances. The other thing not mentioned above is my wife and I have 2 separate bank accounts. One for all 'fixed' bills and one for groceries and gasoline-variable bills. I am contemplating getting a gasoline card, like a credit card, and loading it with $100 every 2 weeks with our paychecks as if it is a bill. This way, the card will run a credit and we can benefit from the cash back on the card. I'm thinking about it...only because I hate debt and don't want it to be a slippery slope. Before I do it, if I do it, I will go back and review how much we spent on gasoline in all of the last 12 months and average it out. If we spent $3000 on fuel, I'll put $250 per month, or 125 per paycheck (which is about right) into the account...
I hope this helps inspire anyone out there trying to figure things out. People don't usually discuss money very much and this could have helped me tremendously when I first started out...
Photo by Dylan Gillis on Unsplash