Wednesday, May 12, 2010

Budgeting for pension cut -5 Bill Records

An important part of budgeting is having a method for paying bills that allows you to be aware of how much you are spending on a monthly basis. One monthly spreadsheet I have been using for many years to keep me on track with my expenses and budget is a simple list of the bills I expect to pay in the month.

The following shows a rough example of what I use to keep track:

-------------------------Date Due----Date Paid----Amount------Check#-- Posted

Auto Loan----------------20th
Arrow Exterminators------Quarterly
AT&T- Bell---------------19th
Auto Insurance-----------11th
Broadview Security-------15th
Cable TV-----------------28th
Dell Computer------------5th
Homeowners Ins.-----July
Medical premium----------31st
Trash removal------------19th
Taxes Federal------------Quarterly
Taxes- House City--------Yearly
Taxes- House County------Quarterly
Taxes State-------------Yearly
Cell Phone---------------10th
Lawn Maintenance---------31st

I also have set up a Bill folder on my Favorites in the Internet browser that lists all the bill websites corresponding to the list of bills on my spreadsheet. That gives me easy access to pay online as many as I can.

I pay bills on a once a week basis for the week that they are due and record in the spreadsheet when I have paid them, how much, and the check number if I use a check. I try to pay as many as possible on line since it is easier, cheaper and gives you instant receipt feedback.

The monthly spreadsheet of the bill record helps me keep track of my total spending so that I can see whether we are going over our budget in the month and allows for adjustment in the next month.

This may sound too complicated and fussy to many but I find it a useful method and because it also forces a routine discipline I have rarely missed a bill or been late in payment. Forgetting to pay a bill such as a credit card can lead to enormous interest rates and bank fees so its a really good idea to keep on top of the situation and pay bills in a timely manner.

Many banks will also help set up automatic bill paying so that you can let the bank pay on your behalf electronically when the bill is due. Many companies also have that feature in their systems where you can opt to pay automatically each month out of your checking account.

If you feel comfortable doing that it is certainly a good and safe method. In my own case I prefer to have more control than that, hence my preference for paying the bills myself and recording them as shown above.

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