While reviewing my credit card charged recently, I was actually surprised at the total amount even though most of the big purchases were factored in and accounted for. The surprise came from all the small grocery items I ought here and there. On top of that, some people gave me money to buy items for them since they were on sale. So financially everything was okay, but looking at the total monthly bill was just a shocker and it reminded me why in many cases I always set aside enough money to pay all my small yearly expenses in the beginning of the year.
If you don’t, it can be easy to look at your bank account and just say you have enough to pay everything that is expected. So you end up not taking the extra mile to say save more money while that nest gives you confidence to just purchase what you want. Imagine here if this was a scenario that I had to spend extra money for whatever reason where people didn’t give me money for the purchases. By the end of the month I could have been then in a warning mode and in danger of not being able to pay the bill.
That’s often what I hear when people live pay cheque to pay cheque as money people just spend I they have it in the bank and assume next week’s payment will cover the expenses. I just find it so much better to just pay it all right away in the beginning of the year if possible. For example, if you phone bill is $600 a year in total then I account for that right in the beginning. Then the rest of the year I know for sure that will never get in the way.
You could say most people wouldn’t exactly have an extra $600 sitting around. But I think for most with a steady job I bet you can save up and do all the hard work early such as no dining out and all at once versus sporadically throughout the year when you think you now need to budget. Way less stressful in my opinion.