Find yourself living pay to pay? These tips for managing your regular, recurring expenses could take some of the pressure off.
1. Create a bill calendar or spreadsheet
Consider plotting all your weekly, monthly, quarterly, and yearly fixed costs on a calendar or spreadsheet.
This will help you make sure you’ve got enough money to cover them.
You could get help from apps like Bobby which help you see all your subscriptions in one spot.
Once you know what your bills total, you can make sure you’ve got enough money to pay.
2. Consider a dedicated bills account – separate to your everyday account
It can be tempting to keep all your money in one account, but this can make it easier to spend more than you can really afford.
Keeping your bill money in a separate account is one way you could remind yourself to save it for its intended purpose.
3. Divide any annual expenses by twelve and set that aside monthly
It’s a lot easier to cover an $800 rego fee when you’ve been setting aside $65 per month, or $15 per week, for it, so think about saving for big expenses like you would a big purchase.
4. Treat regular expenses like bills
If you regularly access a pay as you go service, such as therapy or personal training appointments, treating them as bills may help you keep enough on hand to cover them.
Thinking of your supermarket visits as a weekly $50 Colesworth bill could help you budget for it.
5. Regular monthly expenses? A bill buffer could help
If your expenses come to a regular amount per month, one idea is to save an extra 5% or 10% on top of it, to help you prepare for any cost of living or inflation increases.
Doing this for bigger expenses, such as rent, can help give you peace of mind that you’d be able to afford a looming increase.
And if you don’t have enough wiggle room to do this, it may give you enough of a heads up to start changing your spending habits or putting other plans in action.
6. Don’t forget your emergency fund
Keeping your emergency fund separate to your bills account means you won’t be dipping into your rent money if your car breaks down, or you get a toothache and need an emergency dentist appointment.
7. Set up direct debit or automatic payments
Automating your recurring payments is one of our top tips for being smart with your money. Life can be hard enough without having to remember to manually pay your bills, too!
8. Consider paying back interest-based bills fortnightly instead of monthly
If you’ve got the option, picking a more frequent payment schedule for debts that accrue interest, such as mortgage or credit card payments, may help you pay them off quicker, and for less money.
You could get an extra month’s worth of repayments if you pay weekly or fortnightly, because there are 12 months in a year, but 26 fortnights and 52 weeks.
For example:
Hypothetically, you’re making monthly repayments of $2000, which equals $24,000 per year.
You could decide to switch to fortnightly payments of $1,000, which equals $26,000 per year.
Or,
You may choose to switch to weekly payments of $500, which equals $26,000 per year.
This could help you pay more off your principal amount, too.
(The above is an example only. Do your sums before making any decisions, including how interest may impact these numbers, and seek financial advice if you’re not sure.)
MoneySmart has a personal loan calculator that can help you figure it out.
9. Keep looking ahead
It feels great to be debt-free, but it doesn’t mean you should spend all your money.
Once you’ve paid off a big expense, consider whether you need to begin saving for the next one. Bought a new phone? Start saving for your next one. Just got back from holiday? Start budgeting for your next one. The idea is to keep your cash flow as smooth as possible.
10. Contact your financial provider if you’re struggling
If your bills are starting to pile up, and you’re not quite sure what to do, you’re definitely not alone.
Credit and utility providers, such as banks and power companies, commonly offer their customers temporary financial hardship arrangements, which can allow them to temporarily stop paying their bills, or let them pay less, for a specific amount of time.
MoneySmart is an Australian Government site with a list of financial hardship resources you can access. The earlier you get ahead of things, the better.
