Extreme Budgeting Option 1 Atomatic deposit when bills are due Extreme budgeting is for those who can't seem to save or even keep enough money to pay the bills. I have been working my system with various people and there are those who really want to do things right, but are just too impulsive to do the right thing. I have also found people who work a lot of over time can have a very wide variation with their income which makes it much harder to budget. I have found a way to make a slight change to this system to handle this situation. Most people either get paid Weekly or Biweekly and most bills are monthly. What tends to happens is that even though it seems that you have a lot of money in your checking account, the reality is that it may not be enough to pay the bills when they come. The illusion of having money especially when there is overtime involved makes people believe that they have more to spend then they really do. Internet banking (ING Direct) creates some great options to solve this problem. With internet banking it is very easy to set up an automatic withdraw on the same day you are paid, weekly or biweekly. Also, you can set up an automatic deposit to your checking once a month when the largest bills arrive. This means that as you get paid, your bill money will be removed from your sight, and you will have a clear view of how much money you have available to spend. At the end of the month your bill money will automaticly be returned to your checking account to pay the bills. Once you break your bills down to Weekly or Biweekly, just add that amount to what was going to savings. Once a month set your monthly bills total to automatically transfer back to checking. You can adjust this any way you would like. It could just be for your large bills, or it could cover all your bills. The only other thing I recommend is that you keep a good cushion in your checking. I recommend five hundred to start with. This will be needed if you are going to use this method to pay your bills. There are always small bills that need to be paid biweekly, so you will need to have some money available to pay them. Just realize that there is no extra money to spend once you hit the limit you set. It is only to be used for bills. Extreme Budgeting Option 2 More spend money when you work overtime. If you are working overtime just to put money aside for fun this is another option. In this case you would put a set amount into your primary checking account and a set amount to your savings account, but allow the over flow to go to your spend account. This way when you work over time the extra money is put into a separate account and you'll know exactly how much money you can spend. Many companies limit the amount of accounts you can direct deposit to. If you need to you can deposit extra money to your ING Savings, and then set up an automatic transfers to another account. Extreme Budgeting Option 3 Automatic bill pay I generally recommend not paying your bills with auto pay. Someone that is just starting out with a budget should definitely not do this. However, once your budget is up and running, and working without problems. Then you may consider auto pay. This requires you to have a large safety net in your checking account. If you are a person that can feel comfortable leaving at least 25% of your monthly pay as a cushion then you may like the freedom of auto pay. If you set up most of your bills on auto pay, you should try to set up your payments for two biweekly dates, such as the 5th of the month and the 19th. This will give time for the payments to clear so you will be able to see a true balance in your checking account. It would be pretty hard to balance your checkbook if there were always outstanding payments going out. When using auto pay, it is still necessary to check your bills. If the amount on the bill is different you can go to your bank online and change the amount, or make an extra payment to cover the difference.

Extreme Budgeting