Happy payday (someone’s getting paid today)! Whether you’re paid biweekly, semimonthly, monthly, quarterly, annually, etc. there is a routine that you should adopt in order to keep your finances organized. Each week of payday, I follow a routine that keeps me up to date with my bills, knowledgeable of all my income, and on track with my budget. Hopefully my routine can spark you to make some adjustments to your financial routine for the better.
I always take the time to write out my budget before payday. If you are not salaried, a great way to track your hourly pay is through Paycheck City. I love using their tool because the expected taxed income is always accurate. With that, I list all of my bills and budget areas that I plan to cover that check. Most importantly, I compare my budget categories to plans I have coming up in that pay period. This way, I am prepared to cover any expenses associated with them well in advance. After the initial budget draft, I am always tweaking it up until payday based on new plans, changes to savings goals, or unexpected expenses.
The morning of each payday, I check my account. I know this seems very thirsty but there’s a method to my madness. I’ve had a few occasions where payroll was not setup properly for my direct deposit. Consequently, my paycheck was not deposited into my account. Also, with paydays being on Friday, I could not expect any money into my account until Monday morning. You can believe I paid a visit to my job for an asap manual check, whether I was off or not.
So, first step is to verify that the money is there! I also check my paycheck stub to make sure the numbers match. Especially in jobs where commissions are earned, I want to see where extra funds came from. Once these things are verified, I take a final glance at my budget and adjust accordingly. One great financial tip that I try to stick to is making sure all my funds are accounted for. If there is a balance after covering all of my expenses, I will add that amount to my savings budget or personal spending budget. Allocating all of your funds discourages any deviation from the budget in fear of overdraft. (Sometimes to have to play the mind tricks to stay disciplined).
After verifying my funds and solidifying my budget, it’s time to pay off these bills! Despite the conveniences, I opt out of automatic payments for a few reasons. 1) I want to personally track the fluctuations in my monthly bills. 2) I do not pay my bills on the same day each month based on my payroll schedule. 3) I want to closely track money in and out of my account for personal recording and fraud prevention.
Manually posting bills gives me complete control over the bill pay process. I still receive paperless bills and complete the same steps online. However, I avoid all automation. The only automatic bills I have are small subscriptions and I keep them on my credit card. I keep these separate because the bill amount is consistent each month and I know what to expect.
Savings is such a crucial part of financial health, not to mention all the things it provides for long-term planning and security. I try to save around 10% of my income per check, but the key is saving something. There are times I’ll cut back but still put money away. I made a point to make this it’s own step because I am learning the true benefits of saving. Being able to take trips, buy a car, and move between states within a few short months were all possible due to my saving habits (and good timing). I place my savings into a separate account and make sure to track this before allocating any spending money to myself.
Lastly, I set aside my spending money. As I said earlier, all money is accounted for in the budget. So at this point, I should balance out to $0 in my account (not including the carry over personal money that I did not spend from last month). At this point, it is simply a mental “set aside”. I track my frivolous spending weekly to ensure I am within budget. Sometimes, I adjust my budget further to make sense of the money I have left (including that extra from last paycheck). The goal is to stay within budget.
Since most of my bills are paid on Friday, none of the payments show up in my checking account until Monday or Tuesday of the next week. Again, in an attempt to prevent fraudulent activity and to track my own activity, I check my account once on Monday and Tuesday mornings for the automatic withdraws. These payments were made manually, but on the bank’s end they are still considered automatic.
Another reason to double check deposits and withdraws are to double check your own errors. I have had instances in which I set my payment date to the future due date instead of the date I setup the payment. In that case, I had less money one week later because I scheduled my payment too far into the future and missed that the money was not subtracted from my account already. Sometimes checking for that human error will save headache in the future.
With all necessities covered, I am able to look ahead. I tend to forget there is a whole two week timespan between pay periods and I be living this lavish life over the weekend after payday. Then I remember I have gas, food and events/activities the next week that I need to hold money onto for. So at this point in the beginning of the week, I will estimate how much spending money to allocate for each week. By further itemizing my money, there is less likeliness that I will overspend in one week and fall into the vicious “living paycheck to paycheck” cycle.
Going into the second week, I begin to plan my next budget and we start all over! I have found these small details to be helpful and really keep me on track with my budget, keeping up with bills and maintaining a decent balance in my account at all times. Other things I do to stay organized are keep folders in my email for all statements and payment confirmations, periodic debt tracker worksheets to get a snapshot of my bills, use the Qapital to boost my savings and use the Mint budget app to monitor my credit score.