Wednesday, October 26, 2011

Living Richly In Retirment: Budgeting a Month at a Time

Note:  why is it that some blogs will not allow me to sign in with my Google ID?  I know I'm signed in, but I'm unable to comment on Tamara's blog over at Early Retirement Journey (she has a great post on grocery shopping by the way). It's a conspiracy!

I consider myself to be extremely frugal and really good at getting the best deals. I've shared that here and elsewhere, and on occasion have been crowned the queen of frugal.  However, as always there are two sides to every coin.

The other side of mine is this:  I am not a great financial manager/budgeter.  In other words, I do the best with what I am given, but my nature is such that what I am given will all be spent in the end. I am a grasshopper at heart (and was married to a grasshopper with a little ant gene mixed in there somewhere). I am also, by nature, not an organized person. If it isn't written down it may not get done, if you get my drift.

I say all the above not to complain in any way. I enjoy living richly on the money I have, and have a full life. However, my primary concern in terms of money management lately has not been the amount, but the way the money comes in.  Most of it has been irregular (in terms of time and date, if you will)

For the first half of our marriage, we were paid monthly.  My husband was in the military and we actually chose once a month pay deliberately.  It only took me a couple months and I was "in the groove".  For the second half of our time together we were paid every two weeks. Then, I went to my monthly pension (and drew out money whenever I "needed to"), and some irregular income streams. NOW, I get a pension on the first, and social security on the second Wednesday. I really do not like having to do money management issues weekly. I prefer to take a day, sit down, pay the bills, give myself an allotment and save the rest.  Although this sounds like a small issue, it has been extremely frustrating, as well as distracting.

I'm working now to circumvent this issue.  I approached as many monthly bills as I could, and asked if they could change my due date to the 15th of the month. I'm still working on this, but both my mortgage and my electric bill seem to have been taken care of so far. Second, even though I get paid anywhere from seven to fourteen days apart, I plan to treating my finances like I have one payday. I'm letting that paycheck that will arrive on Monday sit in the bank (barring unknown circumstances) until the 9th, at which point I will sit down and pay everything from phone to utilities to car insurance. Hopefully now that I am finally in  a pemanent  financial "place" (social security, pension and quilting incomeatwo of which have regular dates), I will be able to get on an even keel.

Some folks (retirees and otherwise), don't like having to deal with being paid monthly. They end up having too much month and not enough cash, or being a afraid to spend it all at the beginning of the pay period.  Some folks also are unable to adjust bills and so end up having to pay things as they come through by dribs and drabs.  While I have no answer to the second problem, I have a little experience and sucess with the first.  Part of my sucess is by giving every single dollar a "name" (a technique which is probably worth it's own missive.  Another contributor to sucess in this area is that I pantry shop, or shop to replenish.  Rather than have amonthly food budget (for example), I shop to replenish my pantry and freezer with loss leaders (the exceptions are produce and milk).  Finally, in the early days, I simply took what was left and divided it into four envelopes and hid the others. I won't talk about those times when I forgot where I hid an envelope.

As is my mantra these days, we all have to do what works for us. Some of you may not have "monthly income". Some may have an annual amount and divide it into weekly or monthly increments. Some may still get paid weeky (throught non government sources). However often (or infrequently) your money comes in, consolidated is the key to easy money management.  At least in my experience.  Do you love or hate the way you get "paid"?

3 comments:

  1. I feel your pain! I went from getting paid biweekly to monthly when I took my pension last year. It was tough. We do a lot of the things you do. I go shopping once a month, buy in bulk, look for sales, etc. We also have set it up so most of our bills are paid right after i get paid. My DW balances the check book, pays the bills and tells me what we have left for fuel, entertainment, etc. Some month are leaner than others, but we get the important stuff paid first and that keeps us from coming up short when paying bills.

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  2. About that 'hidden envelope.' I had to laugh. After my mother's death at age 78, my sister and I found several envelopes stashed in various places, all carefully labeled. One said "Stereo for Grace for Christmas--'74." Mind you, this was in 1990! And I remember getting that stereo, but Mom must have forgotten where she put the money she was saving toward it.

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  3. We've gone from a weekly paycheck to a bi-monthly check. So, I have to prioritize in what pecking order the bills will get paid and I have to leave enough left over to get us through the two weeks.

    What helps is to have a liquid savings account specifically geared to get us through the 2 weeks. If not, I can tap into the savings account, which I have, in increments of $50 or so.

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