Spring, historically, is the worst time of year for us financially. Income is tight, tight, tight, and bills are mounting. usually by this time of year, we owe months worth of payments on everything, and we scrimp and struggle to get through. Then, just before summer, an influx of cash comes in, and we try to get caught up in unpaid bills and set some aside for the rest of the year. The tiniest thing can throw off the whole plan.
If our monthly income does not exceed the bills for the month, we tend to rely on credit (overdraft) to see us through. We borrow and then pay it off as we can. We've made great strides over the past four years; we paid off several debts, two vehicle loans, and increased savings. Now is the time to go back to the beginning and do things right.
I will think of the money coming in as my 4 Piles of Money . Having a Fluctuating Income makes budgeting a challenge at times, but with effort and determination, we can achieve all our goals. For the next 60 days, I will balance the budget, using these methods. I've broken down our budget into Fixed and Variable Expenses and percentages for the 4 Piles, so that regardless of what amount comes in, I know how to divide it. :)
Pretty much, I had to dummy-proof it for myself. I have always made it so much more complicated than it needs to be.
Next post, I'll talk about how the 4 piles are split into percentages, and how it becomes dollar amounts.