Vanquishing My Debt

I'm 29 and trying to get a handle on my finances so that, one day, I can buy a home of my own. I've been reading personal finance blogs recently and decided to start one chronicling my own struggles and success (hopefully). I am lucky, considering the amounts of debt and tales of tragedy I've read about... but I am making some positive changes and moving in the right direction.

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Location: Los Angeles, CA

Monday, July 31, 2006

Yay! August is a 5-week month!

Since I get paid weekly, this is the equivalent of an extra paycheck this month. Happy, happy, joy, joy!

I've read a lot of blogs that talk about budgeting (haven't we all?), and it seems that most people budget each month. Since I get paid weekly, I budget for each week. Every year I buy a small purse-size calendar and keep track of my budgeting in that. That calendar lives in the file box with my checkbook, calculator and old filed statements. It mostly stays the same each month, with some minor fluctuations.

Week 1
-Stash $40 in savings (lately I've been getting impatient and sending that $40 to the credit card that I'm concentrating on paying off)
-Withdraw $60 cash, which pays for weekly gas, some groceries and a little spending money
-Pay all utilities
-Pay minimum balance on all credit cards (I currently have 4 cards I am paying... soon to be 3)
-Any leftover money goes to more groceries and household items we need

Week 2
-Stash money in savings
-Withdraw $60 cash
-Pay car payment (yeah, I know, I'm never having another car financed again)
-Send leftover money to whichever credit card I am attacking the balance of (I'm practicing the snowball technique and I love it!)

Week 3
-Stash money in savings
-Withdraw $60 cash
-Set aside half of our rent to be paid next week
-Send leftover money to whichever credit card I am attacking

Week 4
-Stash money in savings
-Withdraw $60 cash
-Set aside the second half of our rent and pay it
-Send leftover money to whichever credit card I am attacking

This plan really works for me, especially since I write out the constant, foreseeable expenses in my calendar several months ahead of time. The only problems are 1) I have almost nothing left in my checking account between paydays and 2) I need to start budgeting regular expenses like car insurance on a monthly basis, instead of when it's due several times a year.

The rare fifth paycheck a month, that Holy Grail of us people paid weekly, usually goes into my savings account to stand ready for irregular expenses that I tend to forget about, like car registration and contact lenses, as well as unexpected situations like car repairs. It's very hard not to go out and do something fun with that check, though, like buying more kitchen stuff, more clothing I don't need, or home decorating things I like. Or right now, the new DVD of Pinky and the Brain. (Yeah, I know - when I said "something fun," you thought I was going to mention going to Las Vegas and playing high-stakes poker all night, didn't you? The sad fact is that, dear reader, while in my own mind I am diva fabulous, I'm actually quite boring and mostly a homebody. But I'll deny it to the death if I'm ever cornered.)

If you get paid weekly, what do you do with your fifth paycheck?


Blogger Kira said...

It's interesting to see who is saying yay, 5 weeks in the month! and who says, ugh, I have a 4 week budget! =)

I used to get paid biweekly and I would pay down my credit card with the 3rd payment in the month if there was one. This was in college so I didn't have many monthly bills and I would just send the credit card money at every paycheck. Unfortunately I was not very disciplined and would just run it up again. ;)

7:03 PM  

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