Managing a Paycheck-to-Paycheck Budget

As a single mom with a single income to raise two daughters, money is always on my mind. While I pride myself on paying bills on time, it still felt like all I was doing was playing catch-up. This past year, I got fed up enough to make some changes, and finally feel like I'm making progress.

  • Divide and conquer the bills. Since I get paid weekly, I divide most of my monthly bills by the number of paychecks it will take to pay them. Usually, it takes 3 or 4. For example: my electric bill is usually $99, so for three weeks, I subtract $33 from my checkbook balance.

  • Budget, revise, budget, revise... I tried many methods of budgeting until finally, I took an Excel spreadsheet template and completely redid it to make it my own. I have both a weekly and monthly budget with columns for "projected" and "actual." It's easy to get discouraged by the differences unless you use the information to revise as necessary. As time went on, some budget items went away completely, and others were increased to the appropriate amounts. My budget is not set in stone; rather, being honest with myself about our spending habits made it more possible to stay within boundaries that work for us.

  • Wants versus needs. When my girls were younger and still dealing with the emotional aftermath of their absent father, therapy was a need. As they got older, I kept paying for it long after they needed it. When I finally approached them about it, they were both perfectly okay with ending therapy, and all of a sudden, my monthly budget had decreased $120! They both know that if they need to, we can make an appointment, but so far, it hasn't come up. With kids, it's easy to think that every dollar we spend on them is necessary, but with some perspective, it may become clear that they'll grow up just fine without.

  • Put the credit cards away. For a long time, this didn't even seem possible to me! But after one company raised my interest rate, I was mad enough to be done with it. I took it out of my wallet and am using the info provided on the credit card bill to pay more than the minimum so that hopefully, I can cut all ties with this company in three years. While my other credit card has a much better interest rate (because it's through a credit union), I will only use it in case of an emergency. I also made a Bring Down the Debt graph as a visual motivator that I keep at my desk.

  • Forget the decimal points. If I spent $88.50 at the grocery store, I write it in my checkbook ledger as $89. While I check my bank balance online almost every day, I only balance my checkbook every few months. This rounding up method means that I usually have more money than I thought I did!

  • Take it slow to build a strong foundation. Some of these steps I've been doing for years; others, just a few months. It takes time, it takes patience, and it takes kindness to yourself to make it work. If something goes wrong, if there's an unexpected emergency, don't give up altogether. Revise, budget, revise.

April McCaffery is a Yahoo! Mother Board member, a Parentella contributor, and maintains a personal blog, It's All About Balance.