At the least, they’re like those annoying second-cousins at family functions you’ve labeled as “Hoverer” and “Close-talker.” The point is, they’re always there. No escaping. You’re tied to them.
Because of this inescapable connection, we often let bills consume our thoughts, and—even more valuable—our precious time. We trudge through the same cycle of worries with each glance towards the fridge and see that bill stuck there staring back, unyielding. You owe me $64, chump! And I want it by the 16th of this month or its overdue!
You answer back in your head. I’ll get you the money, I swear! I…I just need a little more time. I don’t get paid ‘til next week. I can’t pay it right this second. I need my paycheck first.
Add another three or four bills and after a while you feel like the Mob is after you (or worse, the IRS). Everyone wants your money but you have to coordinate your bills with your paychecks. It usually goes something like this:
I’ll pay bill 1 on Monday. No. Oh right, I have these other three bills due. Bills 2, 3, and 4 are all due at about the same time. 2 definitely needs to be paid first or it’ll be turned off. Bill 3 I suppose can wait for a bit… I can definitely put that off until… when would I get paid the next time? Where’s my calendar?
This. Is. Exhausting.
Which leads me to my main point. The biggest time drain in money management is trying to time bills to paychecks. Most people spend somewhere between 4-8 hours each month trying to “manage” their finances this way. Luckily, there is a way for you to cut your planning time down by 90% and regain some precious hours of your life.
The paycheck to paycheck cycle
First, the root problem needs to be addressed: the paycheck to paycheck cycle—a problem so many deem unavoidable. It is avoidable. The answer is not more money, rather it’s how you time your spending.
Create a financial safety zone by slowly building up your funds (I call it your Buffer) so you can live one month behind your earnings…and one month ahead of your bills. Translation: your take home pay from November won’t be used until December. Everything made in December won’t be touched until January, and so on. Savvy?
Building your Buffer
Now, how to get there. For most people, it takes about four months to save up and make this spending shift. You have a handful of options as to how to do it: Go on a spending fast—just for one month—then do it again a few months later. Any money saved can be put aside for the Buffer. Work overtime. Sell some stuff. Discontinue a few niceties (again just for a month or two). The point is, once you’ve made the timing change, spending last month’s income this month, you’re there! It’s a sprint, not a marathon.
Living on the previous month’s earnings will allow you to streamline your bill pay process like never before. Your needed funds will be right there, already earned and ready to go. If you’re on a variable income, the guess-work will be eliminated. Bills can be taken care of in one hour or less. Throw in auto-pay options and you barely have to glance over your bills. No more wasting time on valueless activities: fretting, bill/paycheck coordinating, or stressing. The money is there. You earned it last month. Done and done.
Take the time to get out of the paycheck to paycheck cycle and say hello to a world of time….at least a few more hours of it, anyway.