By Lisa Rowan for The Penny Hoarder
Like New Year’s resolutions and fad diets, budgets seem destined for failure. How are you supposed to allocate every dollar of every paycheck without hiccups or unexpected expenses? Can you stick to a budget and still have fun?
There’s one thing that many budgeting experts fail to mention: There’s not a single perfect template to rule them all. Every person’s financial situation is different, so there can be many budget templates that work. While there are plenty of online templates and apps out there, a paper and pencil can be effective, too. It’s really about cultivating a habit that supports your financial goals.
Still, sticking to that habit can be challenging. So, we’re breaking down four major budgeting obstacles that can throw you off—and how to overcome them.
Getting paid biweekly can throw off your budget when you come across a three-paycheck month. “That magical third paycheck usually means that something is going to be wonky elsewhere,” says Tonya Rapley, founder of My Fab Finance. “It means you might not get paid until the middle of the month the following month.”
Bridget Todd, COO of The Financial Gym, suggests pretending you only get 24 paychecks so the occasional bonus paycheck doesn’t throw you off. She advises her clients to identify the month the third paycheck will hit and try to save that entire paycheck or devote it to paying down debt.
If you don’t rely on steady paychecks, it’s hard to determine how much money you’ll actually have on hand in a given month.
If you’re a server, bartender or other professional who relies on tips, we like Jeff Morrison’s system of figuring out your income: Morrison recommends tracking your income after tipping out other staff. Total your income for 10 weeks, then divide by 10 to get your average weekly income. It’s not a perfect science, but it can help you figure out what to put on the “income” line in your budget. (Tip-based workers can find more info on how to budget in this post.)
If you’ve got a side gig or a contract job and are among the 36 percent of American workers who freelance part or full-time, Todd recommends backing into the amount you need to live on by evaluating your monthly fixed expenses. Include line items like rent, utilities and debt payments, but don’t forget to work in a savings amount—Todd says it should be at least 10 percent of your gross income.
What about irregular expenses, like your twice-yearly car insurance, your subscription to a trade publication or professional association or that dental crown you should get replaced sooner than later? Tally up those expenses then divide by 12 to find out how much they cost each month.
Todd also recommends looking at the last two or three months of statements from your credit and debit cards before you create your budget, so you can see patterns in your overall spending, too, and make note of expenses that are likely to recur.
It helps to earmark cash for those expenses you know will crop up eventually. Lillian Karabaic, CEO of Oh My Dollar!, calls hers “a wish farm: categories for things I want or feel like I should be saving for.” They’re not necessities or the highest priorities—like cell phone replacements or new glasses—but she says it takes the panic out of making those purchases.
Once you start saving for irregular expenses, Rapley advises planning ahead to anticipate them. “Set calendar reminders for two months before it’s due, then one month, then two weeks until due. Don’t let these expenses take you by surprise.”
This one’s easy: If you have a hard time remembering which bill is due when—or those dates just don’t jive with your cash-flow situation—you can ask to have them adjusted.
“If you’re a responsible credit user, [credit card companies are] very flexible, and you have some control,” Todd says. Utility companies are similarly flexible, and you can ask your Internet and cellular providers, too.
“Don’t change your due date to the first,” Rapley says. “You usually have a mortgage or rent due then, so space it out.” But if you have the money for a bill ready before your due date, go ahead and pay it.
More From The Penny Hoarder:
This 19-Year-Old’s Saved $85,000 in 10 Years. Here’s Exactly How She Did It
This Couple Drives for Lyft and Makes Up to $1,500/Week While Raising Kids
A Month-by-Month Guide to Saving $1,000 and Ending the Paycheck to Paycheck Lifestyle