Monthly Archives: March 2010

Fixed Expenses and Flexible Expenses: How to Budget for Both

I’ve tracked all my bills over the course of the year, including annual expenses like car insurance, and averaged them out over my pay periods.   Each pay period, a specific set amount is transferred into the bill pay account from where my direct deposit goes.

Most bills automatically deduct from that account, and some (like the local city’s water & sewer bill) I pay by hand since they don’t have auto-options.

This method makes it easy for me to save up the lump sums for auto insurance, AAA membership, magazine subscriptions, and so on, with the money just collecting and waiting to be used where I can’t spend it.

We also changed our daily expenses budgeting to cash from debit cards, so we can easily see how much disposable income we have over the course of a pay period.  Extra money that we want to save for some specific goal (getting the cats fixed) can be simply set aside in a labelled jar, or it can be re-deposited into the checking account.

Nice and easy!