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?
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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.
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If you want to pay your bills on May 31 then you have to budget for them in May.
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Okay, so I should budget the money for June's bills into May's budget but put June's spending money (like grocery money, gas money, etc) in June's budget. Then when I get paid May 31 (money to be spent for July's bills), put it into June?
It's just a mental shift for me, so I'm trying to catch on.
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evergrowing If you're paying the bills in May, they're not June's bills. If you're writing the check (or initiating the transfer/CC transaction/whatever) before June 1, you need that money in May's budget so your categories won't be overspent.
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You want money budgeted in May for any transactions that will happen in May.
If you zero out June, would you have enough in To Be Budgeted to cover your spending and the bills you want to pay in May (any money leaving your account in May)?
If so, do that, put the money in for May, and use your 15th paycheck to start filling out categories for any money leaving your account in June.
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bevocat May's bills were paid in April. I am asking about bills which are due sometime during the month of June, so I call them June's bills.
@jenmas Thank you.
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evergrowing It doesn't matter when they're due; it matters when you make the transaction to pay them. You could pay in May bills due in June. In which case, that money has to be in the budget in May. You can change the labels around any way you like, you can call June's bills "Fred" if you like. The only relevant factor is when the transactions happen. If they happen in May, the money needs to be budgeted in May.
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bevocat 😄 Yeah I got your point. Didn't seem you got mine. Thanks anyway, though!
I can either wait a day after I budget July's money on May 31st and pay June's bills on June 1 or put the money into May's categories tomorrow instead and pay them on payday, May 31. I get that. The question was whether or not that makes a difference. I'm sorry my calling the bills what I did got you worked up.
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evergrowing If you want to pay bills on May 31, you should have money budgeted in May.
If you want to pay bills on June 1st, you should have the money in June.
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Chris M Yes, thanks! 🙂 I think I will put it in May and just go ahead and pay it.
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evergrowing Obviously I didn't get it! 😄 I didn't get worked up; I was just trying to make sure you understood. It sounds like you do, so now that I understand your question was "does it make a difference?" I'd say no. The fact of the matter is, you could budget that money in May and still pay it in June and it wouldn't make a difference. You could even put June's spending money in May's budget and it will sit there patiently waiting until you spend it, even if you don't get around to spending it until July.
Just to set your expectations, if you have bills that are due around the end of the month or the first of the month, there will probably be months where you have two bills due that month. For some reason my gas company has "flexible" ideas about what constitutes a "month". So you might have to budget for two months' bills in one month. You may or may not skip a month after that to make up for it, so it's best to just budget the money and move on with your life. I know I've gotten my knickers in a twist about it before and there's really nothing to be done.
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bevocat Thank you. :)
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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.
