What Happens If... part 3

What happens if I have money left over in my budget after everything is paid?

Then you need to give that money a name and a job! Remember how we talked about the termites coming in and taking away that extra money in our bank accounts? Well, don't let that happen to you! Give that money a name and a job. It is up to you what you do with that money. You can put it in savings, pay off debt, or use it to buy some tube socks. It's your money, do what you want with it. I only care that you are spending your money on paper, on purpose before the month begins, and that you're not spending more than you make!

Your ultimate goal is to have $0 left at the end of your budget. This is called a zero based budget and it is the best way to control your money because you give every dollar a name and a job. That way, your money is working for you and you're telling it where to go.

What happens if I do not have enough money to pay all my bills?

Take care of the priorities first: Tithing, Shelter, food, utilities, and reasonable transportation. Now if you can’t pay your bills but you’re driving a $40,000 car around – you need to sell it and pay your bills.

Beyond the necessities, you begin listing your other expenses in order of priority. Once you run out of money, draw a line. Anything below that line doesn’t get paid. A funny story that Dave told in FPU is that one day a bill collector called his house and was tearing him up – giving him a good one. Dave calmly said, “I’d like to pay you but you’re below the line” The guy said “what?” “You’re below the line, so I can’t pay you.” What line? “Well, on our budget, when we run out of money, we draw a line and anyone below that line doesn’t get paid.” “Are you kidding me? “No sir – when we’re out of money, we can’t pay you.” “Well, how do I get above the line?” “Be nicer to me next time you call and it might happen.”

You can only pay what you can pay. It’s a gut wrenching process, but you have to keep the basics going first and deal with the rest when you're able.

Why is tithing one of our necessities? A former Bishop of mine once told our ward that if a member experiences financial hardships and cannot afford food, a food order can be placed for that person. If that person cannot pay a bill, then the church can help. The church can pay any bill that you have. The only thing that cannot be paid for you is your tithing. That is your debt to pay, and your debt alone. No one can pay that for you. It is an extremely personal thing between you and the Lord, and you will be blessed for doing so.

If you cannot pay your bills you do have some options:

1. Second jobs are a fantastic idea. They aren't for forever - they are just to get you to where you want to go.
2. Sell stuff! Yard sales are my forte, and we’ll have more info about those later. By selling things on ebay and in yard sales, we’ve made thousands of dollars on our unwanted (or un-needed) stuff. What a great way to get some extra cash to get caught up on bills, pay bills, build an emergency fund, or pay off debt.
3. Do Odd Jobs. Think about babysitting, making cakes, cleaning offices at night, cleaning homes, etc.)
4. Call creditors. If you cannot pay your bills, call your creditors and let them know. Explain the situation. They are more likely to work with you if you don’t avoid them or run. If you run and hide, they will get mad and then they won't want to work with you.
5. Cut out non-essentials. If you can’t pay your bills, then you shouldn’t have cable TV and a cell phone. If you can’t pay a debt you owe, then don’t go out to eat.
6. You can reduce expenses on things like groceries by clipping coupons, buying things on sale, buying generic, or sticking to basics like beans, rice, pasta, and other inexpensive staples.

What happens if we have irregular income?

If you are like many people and either own your own business, work on commission or tips, or get overtime, then you probably aren't sure how much money you'll be bringing home ahead of time. Even if you do know what your paychecks are, you will occasionally find use for this information - think tax returns, windfalls, inheritances, and bonuses.

Many people say “well, I can’t budget if I don’t know how much I make.” And that is a big old excuse. You CAN budget if you have an irregular income. Many people on an irregular income have a base salary. It is what they get paid regardless of what their commission might be. That’s a great place to start. Again, we start with the basics – tithing, shelter, food, utilities, and reasonable transportation. Then you begin listing the other stuff you need to take care of. When your base salary is gone, then you need to do a separate little area of your budget (or use the Irregular Income Planning form) and list what's left in order of importance.

If you have absolutely no clue what you’re going to be paid, then you begin listing things in order of importance (on Irregular Income Planning form) – tithing, shelter, food, utilities, and reasonable transportation will always be at the top of the list. Again, we’re not going to starve but have Visa current. It’s not a smart thing to do. Then list the remaining things in order of importance.

So, you are essentially allocating your money with an “if/then” approach. “If I make $500, then we are going to pay the rent.” If I make $1,000 then we are going to pay the rent, the utilities, food, and have money for gas. If I make $1500, then we are going to be able to pay everything and have a little money left over for going to a movie. So, you at least have some sort of plan for your money.

Now when payday rolls around, you’re going to sit down and have an Emergency Budget Committee Meeting to actually sit down and start plugging some numbers in. You will begin subtracting your bills that you listed (in order) on the form. If you run out of money – draw a line and refer to the "What happens if I don't have enough money" section. If you have money left over - give it a name and a purpose!