Math is Hard

Last week, you named your pages (let’s call each one of those pages and “account”) and assigned the monthly dollar value to each one. For instance, you have an account for your mortgage or rent, an account for your gas, groceries, car payments, etc., all living expenses and debts. Now you need to “put money” into those “accounts.”

How? You do it when you have money come in on payday. There will be other times when you add money, but mostly it will be on payday. Here is where it gets a little tricky. How many times a month do you get paid?

If it’s once a month, then your job is easy. When you get that monthly check, you sit down and, starting with living expenses because they’re more important, write the monthly amount (aka the monthly payment) that expense required. I would start on line one at the far left side and put today’s date, a plus (+) sign, and the monthly amount. At the very right side, I would write the world “balance” and the same amount you just put in (because you only have one).

If it’s twice a month, you must “put money” into the “accounts” every time you get paid, but the amount is not the same as if you got paid once a month. It is the total amount of the payment divided by 2 because you get paid twice a month. Keep a running total on the right–add what you put in today to the balance from last week and write the new balance.

If you get paid weekly, then I suggest dividing that payment by 4…yes, sometimes you get 5 paychecks in one month, but MOST of the time you don’t. We’ll discuss what to do with that occasional extra paycheck another time.

If you get paid bi-weekly, I suggest following the instructions for the twice a month paycheck recipient. And, yes, we’ll talk about those occasional extra paychecks later.

Next week we will discuss how to “take money out” of the “accounts” you have created.