Do you want to know one of my quirky little secrets? I actually enjoy paying my bills. I am the only person I know who really loves
the chore of paying bills. It may simply
be the accountant in me that enjoys the rhythmic process of ripping open bills,
writing the checks (yes by hand!), and logging them into my register. However, I also have a theory that my love of
bill paying has to do with my financial stability. I am never worried about having enough money
to pay my bills. Surprise expenses can
get me down sometimes, but they do not put me in a panic. I enjoy getting to see just how much is going
into savings this week and where that puts my total savings balance. Please do not misunderstand me, I am not rich
and I never have been. But I am
financially independent, and I do not live paycheck to paycheck.
While paying bills may never be your favorite chore, I
firmly believe everyone can get to a point of stability where it is not so
scary. The first step to learning to
enjoy paying your bills is simple: know
what your money is doing. I have read
numerous financial articles full of great advice. It is beneficial to save for retirement,
build an emergency fund, set budgets, pay down debt, cut expenses, make money
on side projects, etc. However, the
problem I see most of my friends and family struggle with is much more basic
than the advice in these articles. It
seems like no one knows where their money is going and whether they are spending
more than they make. Before someone can
put all that great financial advice into practice, they need to assess the
current situation.
So how do I know where all my money is going? First, I figure out how much money I make in
a month. This is easy since I am
salaried and so is my husband. I know
exactly how much is going to show up twice a month for my paycheck and every
other week for his. Next, I list every
single thing we spend money on in the month, regardless if I pay with cash or
credit, and then I categorize it. There
are numerous websites out there that will help people do this, but I rely on
basic Excel. In my Expenses spreadsheet,
I have made a tab for each month of the year and a totals tab that combines all
the others. Each tab is separated into
columns like House Payment, Electric, Insurance, Groceries, Dining Out,
Medical, School, Household, Entertainment, Charity, etc. At the end of each month, I subtract my expenses
from my income and see if the number is positive. It almost always is, but when it is not I
know that either a) I had a large one-time expenditure which came out of
savings or b) I was too extravagant during the month.
When I become too extravagant, then I know I need to reign
in my spending in future months. I use
the categories to see where all my money went in a month and figure out where I
can cut back in the future. Some
expenses are inflexible (I cannot change my mortgage without a costly and
time-consuming refinancing), but many are easy to manipulate. My biggest weakness is dining out. So when I start getting out of control in this
category, I either plan more meals at home or I switch to less expensive
options (Fosters Grille instead of Texas Road House). I also look at trends over time to see if
there are any patterns that I need to plan for in the future. For example, I save money all year for
Christmas so I do not have to come up with several hundred dollars in December
to buy presents.
I know that making money changes is hard work. It took me several years to get to the point
where paying bills is no longer a worry.
It was really important to me to get there though, because I never wanted
to recreate the instability I saw my parents struggle with my entire life. When it seems like my financial goals are out
of reach, I remind myself how much better off I am than they are and how much
better off I am than I used to be. I
also remember that no matter how difficult something seems now, I can make big
changes given enough time and effort.
I am off to pay my bills.
See you next week!
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