Let’s discuss how to manage your finances to avoid end-of-the-month droughts.
I’ve got a way to make March go nice and slowly: spend all of your budgeted cash in the first two weeks of the month.
You might have done this in this month, ensuring that the last two weeks of that month moved like molasses. Instead of exclaiming “wow, where did February go?” you probably thought “thank goodness it’s March!”
I’ve done this to myself before. Since I am so intent on sticking to the budgeted limits we’ve set, if we spend our entire budgeted amount in the beginning of the month then the rest of the month is spent waiting, anticipating, and being preoccupied with money.
No one wants to live under huge financial restraints, especially when it makes us wish away our time.
So Why Do We Leave Ourselves Penniless at the End of the Month?
There are several reasons that I can think of, some based off of experience.
- One bone-dry end of the month seems to guarantee that the next month ends the same. This is because you get super excited to be able to purchase things again at the beginning of the next month that overspending occurs—the elastic spring-back from financial starvation.
- Or you have put off too many purchases from previous months that you just get so sick of waiting to buy them all and decide to take care of everything once the next check comes in, like an overly ambitious race horse just out of the gates (who later loses the gusto and finishes up in the vanishing plume of winner’s dust).
- Or big expenses come up and even though you know your fate of the end-of-the-month drought, you are forced to hand over the rest of your budget and then some to put out the fire.
No matter what your reason may be for why you spend all of your money at the beginning of the month, it all ends the same: days pilfered away in anticipation, salivating at the thought of what you are going to do with exactly each penny coming in, staying at home, and finding new, creative ways to use food in the cupboards and freezer.
That is, unless you go into the throes of debt, which will definitely ensure there will be no change in your circumstances moving forward.
But this doesn’t have to be your fate. Instead, why don’t you try to time release your next month’s budget?
Time Release Your Money
The pain medication industry came out with a great product when they made time release capsules. It was to prevent gnawing pain from rearing its ugly head before the four hours was up and you could safely take another pill.
After all, what is half an hour of euphoric pain relief if you must spend the 3.5 hours after that in torture?
Like a good pain medication that slowly releases its merciful compounds, you can slowly release your money to yourself each month.
Choose How You’d Like to Time Release
There is no one that can do this for you. You have to be the one who enforces this by ensuring that you do not have access to all of your money at once.
It’s got to be you who puts the mechanisms in place and who has the discipline to adhere to your own rules.
Depending on your discipline level, there are different ways that you can achieve this.
- Strong Barrier: If you want a strong barrier between you and your full paycheck/budget, have it direct deposited into one account in which your bills are automatically withdrawn from, then open a separate checking account with a debit card and have automatic, time-released amounts of spending money sent to it on a weekly basis. For example, if you have budgeted $300 per month for groceries, then there should be a weekly deposit of $75 into the second checking account.
- Strong Barrier #2: If you do not wish to use this system but need a similar level of separation, load gift cards each week with the budgeted amount at your grocery store, gas station, and any other place you know you will go to (be wary of gift card activation fees). This draws a solid demarcation for you because when the money is gone you will be forced to stop and think about whether or not you want to take more money out of your account and load it onto your prepaid card.
- Less Strong Barrier: Don’t need such a big separation between you and your money source? Then divide up your spending money by four weeks and hit the ATM/go to the bank once per week to withdraw your allotted amount. If you use a credit card for the reward points (and pay it off diligently within the grace period so that you do not incur interest), write down your spending budget per week and check your credit card statement religiously so that you do not go over the allotted amount each week.
For people like me — who used to work for an employer that paid once a month — figuring out how to time release your pay is critical so that you can enjoy your entire month and not just the exciting and lucrative first part of it.
But if you’re paid bi-weekly, there can also be that tendency to spend all the money in week one and have much less in the second week. Give yourself a better end to this month, and put a system into place. Your end-of-the-month self will thank you.