Budgets for people living on just one paycheck, while restrictive, are a necessary evil, especially if you’re downsizing your budget from two paychecks. Budgeting becomes more of a necessity than it may be for a dual paycheck family. However, creating a budget when you are living on just one paycheck is a wise, money saving idea.
To begin the budget process, start by taking a look at your last three months of bank statements and bills so you can see what money is needed to pay your bills and where you may have been overspending. Itemize every expense and every bill so that you know where your money is going and where you can cut expenses, if needed.
After you have gone over your bills and looked at your spending habits so that you know how much money you need each month in order to pay your bills, write out your monthly bills and their due dates. This will enable you to assign each bill to one of your paychecks, based on its due date, so that you are never late paying your bills. The best way to do this type of budgeting is to use a calendar and write down your paydays. Once the paydays are written down you will then need to write each bill on its due date. In other words, if your rent is due on the 1st of each month, write “RENT” on the 1st of each month. Use the same calendar for bills and income to make it easier. When you look at the bill due dates and your paychecks, you can easily see where each paycheck needs to go. This is a great budget technique for anyone, especially a beginner.
Budgets for people living on one paycheck should include getting rid of as much debt as possible, as fast as you can. The best way to do this is to make a list of all outstanding debts you may have, including credit cards and loans, then start paying them off, in order of balance, smallest to largest. When you get the first one paid off, take your extra money and put it into the next debt on the list; seeing your debts go down in number and dollar amount will motivate you to keep going. Making a budget that requires you to pay off debt quickly will help you when you are living on the one paycheck.
Now that you know how much money you need each month to pay your bills on time, you are ready to move on to the next step in budgeting. People living on one paycheck may feel that they must give up fun because there’s not enough money in the budget for necessities, never mind leisure activities. With some shrewd budgeting techniques, the budget for fun in the one paycheck family doesn’t need to be deleted, just reduced. Take all vacations and leisure activities from last year, add up those expenses and divide by twelve. This is the amount that you need to set aside each month if you want to maintain the same holidays, vacations and fun activities. In reality, for most single paycheck families, this amount will need to be greatly reduced out of necessity. Plan a shorter vacation or something closer to home this year. You might consider bringing your own food on vacation, looking for coupons for reduced fee activities or buy this get that free deals. A little creativity and planning can allow you and your family to have a great time for less!
When making a budget based on one paycheck, remember to prioritize your monthly bills followed by debts and other expenses followed by, you guessed it, leisure activities and vacation money. As hard as it might be not to take your family on a Disney type extravagant vacation every year, remember that kids will be happy with simple activities like making s’mores around a homemade campfire, camping out in the backyard or even the living room, taking day trips to the beach or going to the lake instead of the ocean and your wallet, when you’re realistic and skip the vacations for a year or two until you’re back on the dual paycheck budget, will thank you.
Parenting viewpoints from parents in the trenches, because parenting doesn’t come with a manual. In addition to