Getting a better handle on your financial life begins with understanding where your money’s going each month. A budget calendar can be an invaluable tool for tracking your dollars and cents. If you’re not sure how a budget calendar can help with managing your finances, here’s what you need to know.
What is a budget calendar?
A budget calendar may sound complicated but it’s not. It’s simply a method of keeping track of when bills are due and when you expect to be paid. A budget calendar can track a shorter period, such as one week or one month, or you can plan your budget calendar on a yearly basis. Either way, your calendar should be able to show you at a glance how much money is coming in each month, how much is going out and where it’s going to.
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Benefits of using a budget calendar
There are some good reasons to incorporate a budget calendar into your financial management strategy. First, having a calendar in place can help you avoid paying bills late. No late payments mean no late payment fees to worry about. Paying your bills on time each month also can help to improve your credit score.
Breaking down your payments on a monthly basis can be helpful if you’re struggling to get into a regular habit of saving. If you know in advance that you’ll need to allot a certain percentage of your weekly or biweekly paychecks for bills, you can then decide how much money to set aside in your retirement account or stash in your emergency fund.
Creating your budget calendar
Establishing your budget calendar takes a little time at first but it’s well worth the effort. Check out these basic steps for getting started:
1. List your bill due dates: First, take stock of all your monthly bills. That includes your mortgage or rent, utility payments, cell phone bill, Internet, insurance and debt payments if you have them. Write down the date they’re due and the payment amount.
2. Don’t forget irregular bills: While some expenses may recur from month to month, others may operate on a different schedule so you need to make sure you include them in your budget calendar. For example, if you pay your car insurance quarterly or property taxes on your home annually, those would go on the list as well.
3. Chart your bills on your calendar and compare them to your payment cycles: Once you know when your bills are due, you can begin filling them in on your calendar. You can go old school and use a paper calendar, create a calendar spreadsheet or try a calendar app if you’d prefer to go high-tech. As you jot down your due dates, make note of when you get paid. This way, you can figure out how much of your income you need to set aside each pay cycle to cover your monthly bills and what you’ll have left over to save or spend.
4. Look for ways to streamline your payments: If your paydays aren’t lining up with your bills as closely as you’d like, you could try asking your payees to change your due dates. Another option would be to consolidate bills wherever possible. If, for example, you’re making payments to several credit cards, transferring the balances to a single card with a lower interest rate may be a solution. Also, take a close look at your expenses to see if there are any bills you can eliminate entirely.
5. Keep your calendar running smoothly: Once you’ve got your budget calendar set up, the final step is maintaining it. Review your calendar at the beginning of each month to see if you need to make any adjustments to due dates, payment amounts or pay periods. Consider automating bill payments and transfers to savings to minimize the time needed to manage your calendar. Lastly, remember to check on the progress you’re making towards your financial goals periodically to make sure your calendar is keeping you on schedule.
A budget calendar is useful for keeping tabs on your fixed expenses but you should also be aware of how much you’re spending on things like groceries, gas and entertainment. Downloading our Illuminate™ app can help you monitor your money habits as you work towards a brighter financial future.