Tuesday, May 13, 2008

Monthly Budget: The Rent "Problem"

As it stands now, my monthly income is based upon two biweekly paychecks plus incidental income such as referral bonuses, gifts, side jobs, etc. I get paid on the 15th and the last day of the month. The way I currently have my budget set up, my end of the month paycheck is technically my 1st paycheck for the following month, with the 1st paycheck of that month actually counting as the second for purposes of accounting. For instance, my first paycheck for April was actually my 3/31 paycheck, with the second being my 4/15 paycheck. The reason I do this is because I've been paying for my rent ($700 - an enormous portion of my $994.19 paycheck) entirely out of that end-of-month paycheck. Since I've started this blog, established a budget, and revamped my finances in January, I've been following this method. What this does is it gives me a (relatively) huge amount of money to "play" with in my second paycheck, but it also forces me to live fairly light for the first two weeks of the month. I think there are pluses and minuses here, based upon my discipline.

But I've been thinking that evening my rent payment out over the course of the month would actually help me budget, in that it is psychologically easier for me to take, say, $200 right off my first paycheck and save it, rather than try to save $400 of my 2nd paycheck. So this month I'm planning on sticking as much as I can at the end of the month into my traditional checking account (out of which I pay my landlord with paper checks) so that I will only have to make up the difference with the 1st paycheck for June. It will probably take me a couple months to get to an even split, but I think I could probably do at least $200/$500 or something similar. I am going to try this and see how it works out.

Anyone have any similar situations in trying to work out budgeting along with income and scheduled expenses?

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