Living on Last Month's Income - question
I have half of June budgeted (meaning the money is already in the bank and added to the categories) and the other half of it will be funded tomorrow when I get paid. The 15th is the first check of the month for me, then I get paid again on the last day of the month. So I think I am one month buffered/ahead. [Or maybe a month and a half since I can fund half of July's expenses when I get paid the last day of May?]
My question is (1) am I? ... because (2) Since I get paid on the last day of the month, I would prefer to pay my June bills that day. Should I be putting my money for June bills into my May categories, then?
For May what I did was move the May money back into April and pay May bills on the last day of April. That's still paying a month ahead, right, but then it appears to set back my budget b/c when I flipped to May it looked pretty slim. How would you handle this? Should I just let it sit and pay things June 1? Does it matter to my being a month ahead/days of buffering?
You need to make sure you have enough money in your May categories to cover your bills and spending for May, then move on to June and possibly July.
If I got paid on the 15th and last day of the month, I would use the May 15th money to cover the first half of June's categories and the paycheck on the 31st to cover the second half. That way I know on June 1st that June is covered completely.
If, on June 1st, you have all categories covered and no overspending from May, then you are 1 month ahead.
Hi evergrowing ,
Congratulations on getting ahead of your bills. I know I love that feeling, and would bet you do also.
Regarding your question of if you are 30 days ahead or not, it truly doesn't matter. Personally, I would say you are. I did the same thing with some of my bills that are due on the first, and instead pay them on the 21st of the previous month. It caused some issues until I learned how I want to define how I use them. This is your budget, you get to fine tune the rules to match your situation. I ended up increasing the amount of funding I keep in the categories, which helped increase how many days ahead I am and how much I keep in the appropriate categories. Today my AoM is growing so that is the main thing I look for.
I know the AoM is a non-sense number that truly has no meaning, and I like to look at it anyway. I like when it grows. Keep doing what you are doing and yours will continue to grow also. What are your plans once you are 30 days ahead? My planned changes were minor so it didn't truly matter in my budget. My plan was to grow AoM even larger. If you have major changes planned for when you reach "30 days ahead," it might make more of a difference in your budget.