Extreme Budgeting Option 1
Atomatic deposit when bills are due
Extreme budgeting is for those who can't seem to
save or even keep enough money to pay the bills. I
have been working my system with various people
and there are those who really want to do things
right, but are just too impulsive to do the right thing.
I have also found people who work a lot of over time
can have a very wide variation with their income
which makes it much harder to budget. I have found
a way to make a slight change to this system to
handle this situation.
Most people either get paid Weekly or Biweekly and
most bills are monthly. What tends to happens is that
even though it seems that you have a lot of money in
your checking account, the reality is that it may not
be enough to pay the bills when they come. The
illusion of having money especially when there is
overtime involved makes people believe that they
have more to spend then they really do.
Internet banking (ING Direct) creates some great
options to solve this problem. With internet banking it
is very easy to set up an automatic withdraw on the
same day you are paid, weekly or biweekly. Also, you
can set up an automatic deposit to your checking
once a month when the largest bills arrive. This
means that as you get paid, your bill money will be
removed from your sight, and you will have a clear
view of how much money you have available to
spend. At the end of the month your bill money will
automaticly be returned to your checking account to
pay the bills.
Once you break your bills down to Weekly or
Biweekly, just add that amount to what was going to
savings. Once a month set your monthly bills total to
automatically transfer back to checking. You can
adjust this any way you would like. It could just be
for your large bills, or it could cover all your bills. The
only other thing I recommend is that you keep a good
cushion in your checking. I recommend five hundred
to start with. This will be needed if you are going to
use this method to pay your bills. There are always
small bills that need to be paid biweekly, so you will
need to have some money available to pay them. Just
realize that there is no extra money to spend once
you hit the limit you set. It is only to be used for bills.
Extreme Budgeting Option 2
More spend money when you work overtime.
If you are working overtime just to put money aside
for fun this is another option. In this case you would
put a set amount into your primary checking account
and a set amount to your savings account, but allow
the over flow to go to your spend account. This way
when you work over time the extra money is put into
a separate account and you'll know exactly how much
money you can spend.
Many companies limit the amount of accounts you
can direct deposit to. If you need to you can deposit
extra money to your ING Savings, and then set up an
automatic transfers to another account.
Extreme Budgeting Option 3
Automatic bill pay
I generally recommend not paying your bills with
auto pay. Someone that is just starting out with a
budget should definitely not do this. However, once
your budget is up and running, and working without
problems. Then you may consider auto pay. This
requires you to have a large safety net in your
checking account. If you are a person that can feel
comfortable leaving at least 25% of your monthly pay
as a cushion then you may like the freedom of auto
If you set up most of your bills on auto pay, you
should try to set up your payments for two biweekly
dates, such as the 5th of the month and the 19th.
This will give time for the payments to clear so you
will be able to see a true balance in your checking
account. It would be pretty hard to balance your
checkbook if there were always outstanding payments
When using auto pay, it is still necessary to check
your bills. If the amount on the bill is different you
can go to your bank online and change the amount,
or make an extra payment to cover the difference.