They can cause such a headache. Especially for any millennial that is trying to simultaneously deal with the pressures of paying off student loans, save for a down payment on a house and any other financial goal ??♀️. Don't even get me started on bills that come due at random times throughout the month! How many of us have forgotten to pay those?! Or put them on auto-pay only to accidentally over draft?! Like I said… finances = a headache.
But I found a simple solution to keep your finances in check!
As a minimalist, I search for the simplest way to do everything I can. I came up this simple solution for keeping your finances in check that ensure all the bills are paid on time! Oh, AND we always have the money in the bank for it! This easily solution for our finances helped us pay off more than $50,000 in debt in just a few years while also allowing for plenty of vacations and fun!
Are you ready for this?
It’s called: we only pay bills on payday.
Okay, so it’s not the best name, but it works wonders. I created a simple spreadsheet of all of our bills and their due dates. Then, I picked three colors:
– 1 for bills due during the first half of the month,
– 1 for bills due the second half of the month, and
– 1 for bills due during both halves of the month. (This last one is really just for credit cards. I prefer to pay them in full at each paycheck so I never carry a balance.)
Then, I highlighted each bill on the spreadsheet according to their due date.
When I get our paychecks on the 1st and the 15th of each month, I just open up our bank account online along with that spreadsheet. I look for the current color and pay everything highlighted in that color right then. Sure, sometimes I pay something on the 1st that isn’t really due until the 11th, but there’s no penalty for paying early and when the 11th comes around, I don’t have to worry about whether or not I can cover that bill because I ate out one too many times this pay period.
BONUS TIP: Leave nothing in your checking account
The second part to this simple solution for your finances is leaving nothing in your checking account. We keep ours at zero. Well, usually $150-$200 more than what we allot for groceries, just in case something comes up (like that birthday present you forgot to buy your friend’s kid….). But we “spend” the entire paycheck as soon as it comes in. Bills are paid first (also note: debt is included in our bills). Then, we pull out cash for fun money. Basically, any wants we may have, date nights, excursions, etc. Finally, we put whatever remains into savings. Sometimes, if there’s a decent chunk of money left over after bills, we’ll add a bit more to student loans to help pay those down faster.
Will this work if you're broke AF?!
YES! That's how we came up with this solution! When we first got married (re: were really broke), we found out quickly that paying bills all at once was a must. It just made more sense to only have to worry about it twice a month, and I don’t like automating because I hate the waiting for money to be taken from my account. Even though it’s coming through me, that money isn’t mine, and I don’t want to accidentally spend it. I want to give it to its rightful owner as soon as possible.
We also discovered quickly that if we left money sitting in checking, we were all too quick to spend it on things we felt like we needed or wanted. The money was in the bank, so why not spend it? At first, we would wait until the end of the pay period to put money into savings, but that would mean there was never anything to move. We didn’t have enough self control to leave it in checking, but if we immediately moved it into savings, it was much easier to leave there. So there began the move to never keep money in checking.
The benefits of keeping your finances in check…
By using this system, we paid off our first car within two years of owning it. We bought a second car with cash. We paid off my husband’s student loans within three years. Today, we have no debt and we never carry a balance on credit cards. My husband and I have taken many vacations each year.
Oh, and I should mention, we did all of this with a very small income. I’m a preschool teacher and only work part-time, and my husband is in the military. We really don’t bring in much money. We’re just incredibly intentional about where we put that money and how it is spent.
Obviously the benefits will vary from person to person, but based on our situation, I know others can benefit from this too! If you want to put more money into the places that matter, pay your bills as soon as you receive your paycheck, and leave nothing in your checking account. It’s really that simple.