For many, payday is the most bipolar day occurring twice each month. They experience the joy of a paycheck lifting them above the waves of certain financial ruin. At the same time, they endure the depressing ritual of grasping money with one hand and handing it over to the grasp of bill collectors. Yet, your mindset related to bill payment may be keeping you in a downward financial spiral.
I continue this fundamental financial literacy series with a second point. The first point was budget fun and leisure. This second point is only pay your bills twice per month. The third will be to limit your shopping, eating out (even for lunch), and other payments to twice per month.
I engage each client in development of both a time budget and a financial budget. I have found that your management and respect for these resources closely correlate with your ability to follow through with success behaviors. I have encountered a number of clients who have a rather frantic approach to paying bills. Their approach leaves them vulnerable to overspending, poor credit, and increased frustration. I offer two quick tips that have helped clients.
1. Use checks and free online bill payment services. I have seen clients stand in line at a convenience store to purchase a money order, which they take to the power-bill line to pay. I have watched clients brave rush hour traffic on a payday Friday in order to pay bills that they could have paid online.
I would prefer that you use Quicken, and print checks from your computer managing your finances with as little paper as possible. But, if you are not ready for that step, at least keep a checkbook and some stamps. Sit down intentionally, calmly on Saturday mornings and write out the payments that are intended for that two week period. Pay your bills on time, AND buy back some sanity.
2. Keep a Income-Expense Journal. Some of my clients do this, but they write their bills on a scrap sheet of paper that they discard. I am suggesting that you keep this monthly report in a safe place. I’ve kept mine in a portfolio binder since 2004. I can look back and see our financial growth, challenges, and strategies. I can plan based on historic data. I can share our progress, trends, and concerns with my entire household.
Though I moved fully to Quicken in 2011, I update the income-expense journal page each quarter in preparation for our household meeting to discuss finances. The main benefit is to support an intentional mindset in relation to money. Even with younger children, the exercise of cause and effect, light switches to energy bill can be illustrated. Positive habits about money can be reinforced.
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