There's a saying we repeat a lot at Debt Decimator -- so much, in fact, it borders on insanity: When you're pinching pennies, every cent matters. Tight budgets don't allow for a lot of breathing room, yet that's what life constantly demands of you – just a slight increase in your margin of error. If you get paid multiple times a month, a great way to bump your margin of error up is by redistributing your bill due dates.
If you want to follow along, we recommend popping open Google Calendar.
Let's say you get paid twice a month, on the 15th and the 30th. This gives you two ranges of dates to work with:
- The 1st through the 14th, and
- The 15th through the 30th.
Now, create an event on each day of the month where you have a bill. In other words: fill your calendar by each bill's due date.
Next, calculate two numbers: the total amount of bills in pay period 1, and the total amount of bills in pay period 2. If we use the bills in the example screenshots above, we'd get:
- Pay Period 1 Total: $719.75
- Pay Period 2 Total: $1,022.30
The gap between these two parts of the month is $302.55...that means that in the 2nd half of the month, this person is three hundred dollars less able to take care of themselves or an emergency situation.
Let's fix it.
Now that you have a visual on your monthly obligations, as well as the total amount you spend each pay period, start looking at what you can move around. In our example, Pay Period 2 is the heavier load. What could we move back to the 1st part of the month?
If we move just one bill from our example (Car Insurance @ $170.00), our new distribution looks like this:
- Pay Period 1 (New): $889.75
- Pay Period 2 (New): $852.30
Why not keep going? I bet there's another optimization we could pull off. Let's shift the Kindle sub down into the 2nd part of the month:
- Pay Period 1 (New): $879.00
- Pay Period 2 (New): $863.05
After these adjustments, the gap between each pay period has been reduced to $15.95...from three hundred dollars.
Smooth Your Bills
In summary, don't just accept all your bill due dates at face value - nearly every bill due date can be adjusted: simply call the company/lender/bill and request a new due date. There's no reason to subject yourself to a difficult part of the month where you barely have two pennies to rub together. Examine your bill schedule and redistribute where needed.
BONUS: If you sign-up for Debt Decimator's mailing list below, you'll get access to a free tool that will let you plug in your bills and try new bill distributions - no math nor calculators needed!