Same as one month ahead?

My entire income is one government pension deposit that comes on the 1st of every month.    My monthly expenses do not exceed the amount of my pension. On the 1st of every month I comfortably fund my entire budget.  Is this approach equivalent to the "budgeting one month ahead" philosophy or should I be holding (INM) each deposit for the following month?

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  • Instead of "budgeting one month ahead" I usually like to think about it as "living on last month's income" (the old Rule 4). I think this puts it a little better. The thought is that if something were to happen to your income stream one month, you would be able to have at least one month of cushion.

  • If you budget your November 1 check into November's budget area, then no, you're not a month ahead in terms of budgeting.

    If you have an emergency fund larger than a month's income, you could rearrange the budget to allow you to budget that Nov check in December's area, and you would be. The difference would be subtle, but you'd basically already have your EF allocated in the event your check were late. Categories would also be filled out, providing spending guidance, just in case you didn't get a chance to budget exactly on the 1st.

  • No, it's not the same. However, you are able to budget an entire month at once like those that budget next month with this month's income. I would continue to budget like that.

    Now, if you want the peace of mind of being a month ahead, you need to start saving into an Emergency Fund category until you have one pension check worth of funds in that category. When you achieve that, that's the same as being a month ahead. After that, you can continue to save into this category until you have six months of funds or more for even more security.

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