A Better Way to Manage Your Everyday Money - Book - Page 18
Payday is king! Or not
The linchpin of the paycheck to paycheck lifestyle is payday. Paychecks are also the focus of
traditional budgeting, tracking expenses and keeping a spreadsheet. This seems to make obvious
sense since payday is when we get more money. But therein lies the basic reason that we get in
trouble with our everyday money: we’re looking at our everyday money in the wrong direction.
Our default view of our income is
backward toward paychecks as indicated
at right by the red arrow. Focusing on
paydays, however, puts our view of our
money in direct opposition to the
direction that our everyday money flows,
as shown by the blue arrows.
The problem with looking backward to paydays is that there is no standard schedule for
paychecks. Whoever is issuing the checks decides when payday happens. On the other hand,
when we need our money is on schedules that are recognized and adhered to world-wide: bills
and credit card payments come due on some type of monthly schedule.
The basic fix for our money troubles,
therefore, appears to start with changing
our view of our everyday money from
when we get paychecks to when we need
to make payments, as shown at right.
With paydays and payment due dates on
very different schedules, how can we coordinate what’s coming in with what’s going out?
Actually, that is easy to do with a checking account.
By replacing
