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Don't Spend Money You Don't Have

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I grabbed the bills that were due from my organizer, opened my budget spreadsheet, and got to work processing the end of the month bills.  Everything was going smoothly, including having the funds set aside to pay the garbage collection bill which only comes once every three months. 

Until I got to the bill with the little yellow envelope.

The yearly registration for one of our vehicles was due, but we hadn't properly planned for it.  I had thought about it months earlier when I made up a multi-month budget package, but forgot to include it in the month's spending plan.  I remember getting the notification for it in the mail a few weeks earlier, and I had put it with the appropriate group of bills, but I didn't double check that it was accounted for in the budget.  Renewing the car registration would greatly impact our ability to do some things during the next two weeks that absolutely had to be done.

So I didn't pay the bill.

We worked our budget to be able to register the car at the beginning of the next month, realizing that the car would just have to sit in the garage for a month. We had been wondering for awhile whether we needed a second vehicle, so this would be a great test.  There were two times when we had to rearrange our schedules slightly to account for only having one vehicle, but we went through the month with our one legally registered vehicle almost as normal.

A month later, I walked into the license bureau and renewed our car registration. 

We were able to do so just in time, as we began to see that having two cars was going to be very useful during our son's upcoming baseball season. 

My first reaction was to pay the bill immediately because that's what we've always done, and because cars are necessities.  That would have had a significant impact on our budget for the coming month.  We do this in other aspects of our life, as well.  For example, we always go grocery shopping on the weekend without evaluating whether we really need to or not.   It's always worth evaluating the true need of having to spend money.

You might just discover it can wait.

Related Links:

Infrequent Expenses Should NOT be Emergencies

Organizing Your Finances Doesn't Have to be Complicated

Do we Really Need a Second Car?

 

Travis Pizel, debt management plan customer with leading provider of debt relief, CareOne Services, Inc.Travis Pizel

Travis is a contributing writer for the My Journey out of Debt and A Straight Talk on Debt blogs. He is also a very active member of the CareOne community forums. Travis is currently enrolled in a CareOne Debt Management Plan (DMP). Travis candidly shares his personal journey to pay off his debt and the tips he's learned along the way. As a father and husband he provides a unique perspective on balancing debt, finances, and family in Minnesota. You can also read more from Travis on the Enemy of Debt blog, where he is a featured blogger. Compensated Blogger for CareOne Debt Relief Services.

To connect with Travis on Google+ click

 You can follow Travis on Twitter @DebtChronicles

 

 

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  • I feel your pain. We just had to pay registration on the van and the trailer. One thing that always puts registration on the high end of priorities for me is that, at least here in California, if you pay before the month that it is due you get one price. If you cross one date on the bill the price goes up and if you are actually past the registration date you have to pay even more. First thing I do it look at amount due and those dates. I HAVE to come up with the money before the price goes up! Good for you for having the money set aside for the trash bill! I know to some people that may not sound like a big deal but I think it totally is! It shows how far you have come with your budgeting. You may not be ALL the way there yet but you are getting close! I cannot even see the surface right now but you make me think I might get there!

  • I completely relate - I just received my trash bill in the mail yesterday...and I didn't budget for it!  It's hard to remember those bills that aren't on a monthly basis.  I did budget for my bi-monthly sewer bill though:)  I'm going to split my trash bill into three and make three payments for the trash this time.  I can handle 1/3 of the payment without messing up my monthly budget.  In September I'll have to remember to budget for the trash and our car registrations...  In the past I would have just paid the trash bill with a credit card.  I keep telling myself - small steps like this are important to reaching my goal to be debt free (except student loans and mortgage) in three years...

  • @kimmer5000 - wow, yeah if the price went up I'd have to rethink what I did, but luckily that's not the case in MN.  I'm soooo happy you see the significance of the trash bill.  It's SO easy to just forget about it for three months and then BAM there's an extra bill that has to be taken care of in one month!  Keep plugging away at it Kimberly - I remember being where you are now, and it WILL get better if you keep your focus!

  • @ondecker - that's a great plan ondecker.  The way I handle it is that I subtract a third of it each month so my checking account available funds (in my spreadsheet) reflects that I've paid that part of the bill.  when the invoice finally  comes in the mail, I know have the funds for most of it already stockpiled.  :)  You are right, it IS the baby steps that will lead you down the path to success.  Those baby steps add up!  Thanks for sharing your experience!

  • I set up our spending plan a year at a time. Most months are identical, mortgage every other Monday, paydays everyother week, property tax week 1, insurance(life, house, car) week 2, cell phone wk3, electricity week 4 and so on.  I also keep a list of the random occasional items that are known, predictable but also easy to forget about: vehicle licence renewals, annual vet visit, spring landscaping materials, safety deposit box annual fee, kids BD party expenses, etc. After laying out all the regular weekly and monthly spending, I go back through the year and insert rows for the odds and ends that come up only occasionally through the year. Over the years as our lives changed a few items were removed from the random expenses list and new items were added. Our only utility is electricity, but it's a doozy, so I also keep a multiyear chart showing our monthly electricity charges. Knowing what a typical April bill has been for the past 7 years means I can plan an appropriate amount for that month. Our electricity costs fluctuate wildly through the year (due to weather) so I plan $250 in summer months all the way to $1200 in the dead of winter. Knowing what your normal includes is priceless. It doesn't mean you'll never be caught off guard, but it sure reduces the possiblilty. I don't plan for salary increases, bonuses, or tax refunds since those are never written in stone. When they arrive I add them into the plan and all things being normal, immediately slid all the excess out again into our retirement savings or make an extra mortgage payment. I've always decided in advance where the money will go IF we get it, but it's never included in the plan until it's in the bank account.

  • As always, JMK, your comment shows how well you have your finances under control.  I guarantee this will be the LAST time something like this happens.  I'm doing something very similar to what you're doing - although not a year a head of time...its about 4-6 months at a time.  We do review the month's spending plan (for major expenditures and bills) at the beginning of the month to ensure nothing has changed as well as throughout the month during our weekly budget talks.  Thanks for sharing how you do things...hope you had a great weekend!

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