The One Thing Not to Say After You Pay Your Bills

September 3, 2009 by  
Filed under Budgeting

We all have monthly bills to pay. It can be an emotionally painful ordeal to pay those recurring obligations for months on end. Sometimes we have to reach and stretch to make the money last the full month.

What do you feel and say to yourself after you have paid all of your monthly bills?

I have assumed different personalities as a bill payer over the years. I’m sure others have as well. Some examples of thoughts that might pop in your mind after that last payment is sent for the month:

The proud bill payer might have these thoughts: “I made it!” or “I think I’ll call Dave Ramsey and get an attaboy.”

The relieved bill payer goes in a different direction: “Whew – that was close!” and “I’m glad the month ran out before the money did.”

The frustrated bill payer: “Why did I buy that stupid gadget and charge it?” or “My car is on life support and I’m still making payments?”

The annoyed bill payer: “That pay check sure disappeared in a hurry!” or “No more kids for me!” but more likely “No more ex’s for me!”

I can’t really argue with any of these emotions. We’ve all had at least some of them. They’re legit and likely therapeutic.

So what is the one thing you don’t want to say after you’e paid all of your monthly bills?

I’ll vote for this no-no from a reckless bill payer: “Finished at last – now I can spend the rest!”

Too many folks look at meeting their monthly payment obligations as sort of a spending traffic light. When the bills are paid, the light turns from yellow to green. Whatever money remains in the bank becomes fair game for the spender. According to this story, 70% of us are living paycheck-to-paycheck. For some, it’s a matter of necessity. For others it’s a mis-guided bill-paying state of mind.

This is how bill-paying success can lead to financial failure.

Of course we should feel good about getting our monthly bills behind us. But we should not reward ourselves with a spending hall pass.

Next month that car on life support may need a transmission transplant. Where will the money come from? Not from that bank account if you’ve spent it during last month’s shopping celebration.

What should you do instead? You could rely on will-power and not even think about the post-bill paying leftovers. That’s a high risk strategy.

I suggest paying one last bill – to yourself. Move the remaining money to a different account. This could be a long-term savings account or where you keep your emergency fund. Whatever it is, make it difficult to access on the fly. You can leave a little behind as a personal allowance, but only a little. Pat yourself on the back in other, less tangible ways.

So what is your bill paying personality?


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12 Responses to “The One Thing Not to Say After You Pay Your Bills”
  1. MasterPo says:

    I agree. Too many people spend every penny they make as a matter of course.

  2. Gail says:

    I automatically earmark funds remaining in my checking account after monthly bill paying for savings/investment accounts, but unfortunately it took me many years to get into this mindset. It’s not easy–to save consistently month after month, year after year, requires planning, discipline, and motivation. Now I just regard saving as another “bill” to be paid along with all the rest (albeit the most important one). I think you HAVE to start with a written monthly budget so you can get a clear idea of your cash-flow. The budget should include monthly savings goals to keep you focused and on track. The sense of accomplishment you’ll feel by staying in control of your spending and piling up savings for your future is well worth the few hours a month it takes!

  3. Terry Pratt says:

    I personally find Paying Yourself a futile exercise. It reminds me of the supremely annoying checking features some banks now have, where, when you use your debit card, a little extra is taken out of your checking account and moved into savings.

    To me, THIS IS AN INCREDIBLE WASTE OF TIME AND ELECTRONS.

    Invariably, the money is soon needed for necessities, and thus gets moved back into checking.

    So what, exactly, is the point?

  4. kitty says:

    I’ve always saved on major things – like taking a mortgage well below what I could afford. This way I’ve never had to worry about smaller bills or even bother with budget: I just had more than enough money to pay for bills and things I wanted (within reason) and had money left at the end of the month that I didn’t need for purchases. The biggest annoyance about bills for me has always been the process itself: the time that I need to spend signing checks and closing envelopes. This is why I have most of this stuff automated today.

    Now, some things like 401K and ESPP – some years ago when I participated in ESPP – got taken automatically. The rest, I simply look at what I had left at the end of the month and move money I didn’t need to savings or investments.

    OK, Terry here may say that this is because I’ve earned above-average salary. This may be the case, except for I saved half of my assistantship too and nobody calls assistantship a large salary. Again, I saved on major things e.g. I didn’t have a car in grad school. In addition to not having to spend money on a car, not having a car meant I couldn’t drive to the mall. I spent most of what I saved after first year of graduate school on a trip to Hawaii, and I’ve never regretted it.

    Maybe I am just a bit cheap which is why I had never run out of money before the end of the month or overspent with the credit card. At least this is what the roommate that I had for a few months after I started working told me “you are so cheap”. Funny thing is that I have no idea why she said it: I do spend money on things I like; I also never complain or refuse to spend when I am with a group. I’ve never refused to buy anything we needed for the apartment; I paid my share when we went out (though I preferred to eat at home and take my own lunch to work, maybe this is why); I choose nice tickets when we went to the Met together. This is still a mystery to me, why she said it.

    Terry – the point is to have money to move back to checking when they are needed and to make some interest on the money in the meantime. BTW – my parents came to the US when my mother was 43 and my father 48. They spoke no English. They’ve never had high paying jobs; yes, they were engineers back in Russia, but they couldn’t work as engineers without English, so they did other things — my father worked in a factory as quality control inspector; without A/C and sometimes night shifts; my mother started as draftsman, than became a designer and at the end did some engineering job (but not for a large salary). Yet they saved money for retirement. Maybe not a huge amount, but enough for the same modest lifestyle they’ve always had. It is possible to save even on small salary and for more than necessities. It seems like you just need to find some way to make money. Maybe you should create your own blog? You sure can write…

  5. Terry Pratt says:

    Actually, when I was an undergrad, I considered assistantships large, relative to what I was earning. Not large by ‘average American’ standards, but large by undergrad standards.

    Back when I was in college, assistantships afforded graduate students the ability to rent (gasp!) 1BR apartments, while undergrads were lucky to have their own bedroom in a house or apartment with several others.

    I just looked it up; currently I live on 98 percent of the federal poverty level.

  6. Terry Pratt says:

    kitty –

    thanks, actually i have what i consider the best as-yet-untapped idea for a blog. that is, the best idea for a blog that nobody is doing yet.

    it requires a lot of ongoing online research, which perhaps is why nobody is doing it yet. (one could, if sufficiently ambitious, make a full-time job of it, which kinda excludes most people who already have full-time jobs. my paranoia is that one of the growing number of unemployed will come up with the same idea.)

    i don’t have home internet access (i don’t have a windows computer, and a lot of ISPs seem to not support my operating system)

    so right now i’m trying to figure a way i can get online at home, then i’ll be able to spend a lot of time getting my blog going.

  7. kitty says:

    “Actually, when I was an undergrad, I considered assistantships large, relative to what I was earning.”

    You may have a point here. I had a room in a (graduate) dorm rather than an apartment, the dorm room and university food service came close to half of the assistantship. Textbooks was additional, and I hardly bought anything else — some cheap clothes here and there, make-up once in a long while and a (very occasional) ticket to the university theater. So yes, maybe it was large compared to minimum wage. But… a 50-something friend of a friend saved money while working as a home care worker i.e. caring for the elderly. She promptly gave all of 70K she saved after a few years of hard work to her good-for-nothing son in Russia for some harebrained “investment” idea of his – breaking a CD and losing interest in process, so now she doesn’t have money again.

    I do hope you’ll find a way to have a blog going. It should be an interesting read. There are cheap used or refurbished computers around – craigslist, ebay, Dell’s outlet. And sometimes Dell has great sales. Another thing is learning (from internet) how to build your own computer or finding a friend who does it. Building a computer from parts is cheaper.

  8. MasterPo says:

    Terry and Kitty – While I agree with the concepts you’re talking about, it’s mere pennies in comparison to the costs of life. The *real* things of savings – housing, energy, food, clothing, taxes(!) – you really can’t cut that down by much, without hurting yourself in the longer run.

  9. Paying yourself first is probably the one best piece of financial advice out there! Really makes the savings grow.

  10. cjbr549 says:

    I think being poor at one time helps the savings ability out. I don’t consider myself rich now, but I don’t have to go out and shoot things to eat (I did that for a few months in JC, 22 cartridges were only 2 cents each). As I graduated from college, got a job then worked my way up I didn’t increase my standard of living by as much as my income increased. This allowed me to put some into savings (and pay off the debts I had run up), but still allowed a modest increase in standard of living. I look back on what I have lived on in the past and I am thankful for what I have now. And it’s nice not to have to worry if the transmission takes a crap in the car, because I have a stash that I can have someone else change it if I don’t have the time or inclination to do it myself (although after the fiasco with the last one I will probably just do it myself anyway).

  11. Bret says:

    I pay myself frist, before I pay any bills. Then, I pay the bills using Bill Pay. After that, I enjoy the rest of my money, knowing that I am pulling ahead each month.

    I had a very low income when I was young and a much better income now that I am middle-aged. This strategy always works at any income level, as long as you are gainfully employed.

    Any reason not to save, is generally just an excuse to spend. And, if you are living at the poverty level, you have an income problem, not a spending problem. Saving will help force you to increase your income.

  12. Marcelo says:

    A better strategy is to conduct a “bill reduction analysis” to determine the needs from the wants and justify their expense. This will modify your spending patterns in the future and reduce the end of the month pain

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