Step 74: Get one Month Ahead

Step 74 of the 100 steps mission to financial independence: Get one Month ahead
Step 74: Get one Month ahead

This step is a hugely important advance in getting control over your finances with the ultimate goal of moving away from living paycheck to paycheck and instead working towards a situation in which you live on last month’s income. Being one month ahead of your finances takes away a lot of stress and worries and gives a small extra financial cushion in your account. I’ll discuss the advantages and disadvantages of this practice first before looking at how you can implement this.

Being one month ahead essentially means that you are using last month’s income for your current month’s expenses. It means that you are ahead of your finances by having an extra month’s pay in your bank account. The money that you are earning this month won’t be used until next month.

The advantages of getting one month ahead

The biggest advantages of being one month ahead include:

  • It doesn’t matter if you get paid 2 or 3 days late, or if a bill comes in earlier than expected.
  • You don’t have to worry about going out next week instead of this week if you haven’t yet been paid.
  • If a bill is larger than expected or budgetted, you don’t have to worry about not having the money and it gives you time to readjust your budget next month.
  • Lastly, if you have a variable income, you can see a lower income month coming with some warning in order to make any necessary adjustments in your spending .

Continue reading

Step 15: Automate your Payments

Step 15 of our 100 steps mission to financial independe: automate your payments
Step 15: Automate your Payments

When looking at all of your expenses in the various categories, you have probably become aware of how many different payments you have and to how many companies. Bills don’t just come in for your utilities and groceries, but also for bank fees, taxes and insurance, and even if you only pay them once a year, there are a lot of bills that need attention.

Many people spend a good amount of time “paying bills” each month and whereas there is an excuse to say that this is a way to more or less know how much you are spending and what you are spending on, there are two major disadvantages:

  • Time investment: going through the various bills and writing checks or making payments online can be very time-consuming;
  • Extra costs: bills not paid on time often result in extra fees.

Continue reading