Making Ends Meet

We’ve already been working to get our money under (more) control for nearly a month. In a normal budget we would have not been able to stick with it for even three weeks.

So it’s the start of week four for us today. And I admit– it’s not as “fun” as it was three weeks ago- but guess what- that’s how the Three Piece Plan is designed. It does not have to be maintained or kept up with. Today I will go to the bank, get out the cash and we’ll spend it. The only thing we have to do is not spend more than we get out of the bank. Next Wednesday we’ll get more money out.  No “household items”, “automobile expense”, etc etc blah blah blah to keep up with. We just do our thing and the money takes care of itself.

Last week I said that we had overspent some- so I subtracted that from this week’s money. It just turns out that we did find- even working off of 75% of our normal weekly amount.  There is a reason for this- check out the category–”Why Use the Three Piece Plan”== it’s because the Three Piece Plan reduces consumption.  We knew going into this week that we were short of money so we just simply spent less of it.  Keep in mind that we got paid last Friday. We only get paid once a month…on the last working day which happened to be last Friday- three days BEFORE the first of the month. This should make for a long month but it also should have been the time of month where we are all excited and go out and eat and spend a bunch of money over the weekend.

But with the Three Piece Plan budgeting system we don’t have just one payday a month. We now have 4 or more paydays in a month! So making our money last from payday to payday is much easier.

Something different did happen this week- we were not short of money- it’s just that we needed some go go juice for the car. I had $15 with me and my wife had $20 or so with her.   So, I just put the gas on the debit card. Tomorrow when we pay ourselves I will simply deduct the $30– but this week instead of being short of money we will have about the same amount we normally would have had.

The point is this– it is VERY VERY VERY (Did I say “Very”?) important that you stay on track with your “Today’s Money”.  The whole idea is to spend less money now so you have it later.

It is the end of the month. We started our Three Piece Plan the second week of the month. Payday is tomorrow. But two things interesting happened…as I expected when theorizing the Three Piece Plan.

1. It is the end of the month- and we have money left over. Wow.

2. And more significantly– tomorrow is payday– but we don’t feel like it. There has not been five days of worry about if we’ll have enough cash to make it. We have not had to clean out the cupboard to scratch together dinner. Our car is not running on fumes.

So we lose out on that “Thank God it’s Payday” feeling. Instead we’ve replaced it with THREE (Next month it will be four, sometimes five) days where we replenished our cash and felt a similar sense of “OK, we made it this week.”

There is still some work to do. Some evolution that needs to take place. In short we need to figure out how to have some of our Everyday Money left over at the end of each week. That is because there are SOOO many things unaccounted for- the car repairs, vacations, etc. This is one of the areas where we will need to learn from others (like you) about what is best to do… either way money burns holes in our pocket- the question is what is the most fireproof pocket?

A separate savings account? I don’t like this- the more you spread your money out the more likely you are to bounce a check!

At home in cash? That is OK- but it seems like you’d be more likely to spend it.

In your regular checking account? More and more this seems to make the most sense. The money just builds up there. The problem comes because if you use it once you are more and more likely to say, “We’ve got money in the bank, let’s just use that.” It may be true, you do have money in the bank- but you need to not spend it because you have not accounted for nearly all of your “Everyday Expenses”. So the problem with keeping it in the bank is that you are co-mingling funds. Hum, we’ll see. I’ll, of course, keep you updated!

Wow. Week Three. The Third Week.

I admit, I am a little shocked.  We started our Three Piece Plan the second week of a short month (February). We get paid on the last working day of the month and get another piece of income around the 20th.

For a year now, every month, at the end of the month, we are out of money. Plain and simple. Out. The well has run dry. I mean we make it. But it’s with $18 left in the account or having to hold off on something for a few days.

Every month. Every month for a year. Every month for a year it’s been this way.

This month– it looks like we will have about 15% of our take home pay left over. Wow.  Now, to be clear this may not be a typical month. We did have a birthday party and Valentine’s day. But there is always something.

I know we need brakes on our car. But we are supposed to pay for such stuff out of our Everyday Money. So we will wait until we have enough of our weekly “pay day” money saved up to put the brakes on the car.

A second point- something very important needs to be mentioned here.

Last week we got handed cash $100 more in cash than our weekly “Everyday Money” pay day is supposed to be. We actually had to break into that money a day early. We also put $15 in gas on our debit card because our $100 bill was at home.  So really we are $115 “over”– that means that today, when I go to the bank to get out our cash- I am going to subract $115 fro it. That will keep us even and on track.

The flip side would also be true, as it was last week. If you get to your pay day and have had a slow week, let’s say you have $200 left over. You still need to PAY YOURSELF EVERY PENNY of your Everyday Money.  Things will come up, things you have not planned for and you need to have money to pay for it.

We pay ourselves on Wednesday. Every Wednesday. If you get paid weekly then of course pay day should be your “pay day.”  But we get paid monthly so we picked Wednesday for our “pay day.” This is when we go to the bank and take all of “Today’s Money” out in cash.

I think Wednesdays are the perfect day to declare that your “Everyday Money” pay day.  It works because it is two days before the weekend and just two days after it.  If you pay yourself on Friday you are more likely to blow too much money over the weekend and if you pay yourself on Monday you are likely to not have money to enjoy the weekend– then you just blow your budget altogether. Now that would be no good!

Now, what if your weekend is actually say Tuesday and Wednesday?  Then consider a  Friday or Saturday pay day.

We had an interesting second week.

Ella’s 2nd birthday party was that Sunday. It was like we were having a wedding. We were at the store constantly. We spent $1.17 for pipe cleaners to give antenna’s to the lady bug on the cake. Then there was candy to fill the pinata, last minute bottles of pop, an extra roll of wrapping paper, and “Whoops, we are out of wrapping tape.”   Not to mention the cake, a sudden realization that Ella just had to have a Mr. Potato Head (my idea), and an extra package of napkins.

By Saturday we were almost out of money. To the point where I said, “Boy we sure spend a lot of money!”

Keep in mind that when you get started on the Three Piece Plan it will initially cause some friction— but not as much as constantly being in debt!

As with any life change there is nothing better you can do than chronicle your journey.

So week one.

Starting off is always the hardest. For practical purposes it is really better to start right after a large grocery shopping trip. So the day before you set as your payday- go shopping and get all of the random things that you are out of.  This will go a long way to helping you even things out. How hard it is to get started depends a lot on just how tight your finances are and what your exact situation is. If you are like we are- you make enough money to cover your bills but just seem to blow a lot of money. You may find that you have so many bills (Today’s Money) and debts (Yesterday’s Money) that you really don’t have enough to live on every day.

If that is the case please- look at the top of this page and either click START or CONTACT ME. I want to help you out of your financial pickle.

Now, our first week.

We got our money out of the bank. And spent it. All of it. And we don’t know what we spent it on. There were multiple trips to Wal-Mart. We ate out a time or two, we filled up the car with gas.  And the money was gone.

Here is something to remember- let’s say you pay yourself $250 every week- you can only spend $25 ten different times before you are out of money! So you fill up your tank with gas and you have spent 1 and a half of those times.

Next week we have both Valentine’s Day AND Ella’s second birthday party to spend on! So it should be an interesting week.

It’s been 10 years since I realized that I am really passionate about personal finances.  There’s just something about numbers, something about the mental side of spending, something about the stress, something about the power that money holds over us that just makes it worth figuring out.

I remember very specifically when my idea of “how to budget” first popped into my head. I was struggling with the idea of budgeting- I knew that nothing seemed to work. No one sticks with budgets– with their endless categories– with envelopes or jars or spreadsheets or software.  Do YOU have time to sit down and enter your receipts on the computer? Do you want to shuffle your money between envelopes or jars?

Here is an even more important question– Say you are on a category based budget– you have $4 left in the “gas budget” but your tank is on empty and you need to make a quick trip “to the city” or “across town”… are you going to NOT go?  Doubtful.  If you need to go then you need to go.

Said another way– category based budgets don’t work.
I know that– and I am guessing you do too.

So, here we go.  Come along.  Learn with me.

P.S.  aka One Last Thing
This site is not a blog.  It’s an instructional site. I want you to participate with me.  I want you to implement the Three Piece Plan in your life.