planning as you go is the good life
Got paid Thursday. I took one of my favorite planning tools, the back of a paystub envelope, and worked out a plan for the entire check. At the top of the envelope I wrote the balance in my account, and then I added it to my direct deposit amount.
This time I was committed to leaving myself enough money to get through the week to my next paycheck. So I brainstormed to think of every thing I should expect to have to spend money on in that amount of time.
The obvious expenditures were my mobile phone bill, the balances on my credit cards, and a retirement contribution. I knew that I wanted to stash money into the My Own Home account, but instead of making the same mistake I made before, I didn’t want to save so much that I’d be handicapped on spending for the rest of the week. I thought about $100 for groceries and other incidentals (which I usually leave in the account as a buffer). And then I thought really hard to see if there was anything else I might spend money on. Then I remembered the roadtrip I’ve planned to go see my parents over this weekend. It usually takes the majority of one tank of gas to get there and another to get back. For me, that’s $35 per tank, or $70, which I added to my list of expected expenditures.
Then I subtracted each of the expenditures, including the $170 for groceries, incidentals, and gas, from the new balance. This left me with $474.09, which I promptly deposited into my My Own Home account. It felt good. Saving as you go is the good life.
If I hadn’t left an allowance for the roadtrip, I probably would have put the gas on my credit card, for fear of cutting too much into my groceries/incidentals allowance or raiding my savings. Then I would have had to pay the cards off on my next paycheck. I understand that that’s not the worst thing in the world, since at least I would pay the balance off of the credit card as soon as I receive my next paycheck, thereby avoiding having to pay interest on the balance. However, why pay later when you can pay now? At this point the financial rewards my credit cards offer really aren’t that compelling - I’d rather have the peace of mind of knowing that I don’t owe anyone anything. I don’t really like creating a tab - even if it’s a payable tab. When I go on my roadtrip, I can pay for the gas, subtract the amount from my checking account, and not give it a second thought. Paying as you go is the good life.
