Monday, December 29, 2008

Budgeting Tips- Commission, Credit Card Interest

So we are finally moved into our new home and it is time to figure out the final budget. In this post I am not going to walk through our actual budget yet, but give some tips I know for different situations when you are considering your budget.

Commission & Budgeting

For smaller amounts

My husband is in a positions in his job where he earns some commission each month, depending on the accounts he's opened. This amount is normally between $30-$80 each month, and I do not put this amount into the budget, as I do not want to get into a bind counting on it. Instead this amount will go into savings, or towards paying off extra on credit cards or medical bills.

For larger amounts

I have also worked at jobs where your only, (or most of your) pay was commission, this can be very tricky for budgeting. The way I did it was I sat down and figured out what the bare minimum I needed to make was to swing a basic budget. No going out, no special treats, just rent/mortgage, groceries, gas, utilities, phone, including internet and TV is your decision, but if you use these, I would- and whatever other bills you may have as far as minimums on credit cards, car payments, minimum on medical bills ect...

I would then see if I at least made this amount every month. If I didn't then I was looking for a second job or a new job. If I did then I would sit tight for a few months while I only paid these things off, and everything extra I put into savings. Personally I used the savings to then pay off bills entirely as I could, with each time I paid off a dept in full I would then take $50 or so to go out and celebrate. You can also start to use the savings as a cushion, set a number, once you have x in savings you will keep putting x amount in and will use the extra to do such and such or buy this or that.

Credit Cards Interest Band Aide Fix

I also wanted to give a quick tip about credit cards if you have a higher amount on credit cards then you can pay down in one cycle.

We racked up about $1000 on our credit cards from moving costs and repairing or buying needed items for the house. Since I can not pay this amount off in one cycle and will rack up interest, instead I will use the money to pay off utility bills, groceries and other bills that you can pay with a credit card, pay off more on the credit card, and then use the credit card to pay the bills.

Be very careful if you do this, that you do exactly this, that you don't spend the money on anything but paying down the credit card, and you still spend the budgeted amount only on groceries and whatnot. This is only a good idea if you cannot fully pay down your credit cards, since it keeps you from racking up as much interest. It does not help pay down the cards anymore, it just helps to save you from getting as much interest added to your cards and upping the amount you already owe.

Make sure you are still actually paying down the card by the budgeted amount, or you will never get out from under this. This is just a band aide fix to help you out with interest, this should never take the place of paying the credit bill entirely, always pay down something on the card, even if it's just $10, each cycle.

*Clip Art provided through free clip art site, if you know of any used here that is not meant to be free please let me know & I'll replace it.

About Me

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I'm a semi crunchy stay at home wife and mama of two boys. Extend Breastfeed, Cloth diaper, Cosleep, Babywear, Homeschool, Homebirth. My sons and I have some serious health concerns (allergies, growth hormone, kidney, lung, spine, etc...). We didn't realize they were genetic (or I had) until after Trace's birth. Tristian had some big medical and possibly/probably autism related delays in early childhood but also taught himself to read at 2yrs and started on math equations at 4yrs. Trace is bit delayed across the board by about 6 months, but as he's 1yr+ behind in height... it's not very noticable ;-) Trace is very musical and hands on. With plenty of common sense, love, good doctors and faith we are doing wonderfully!

This wonderful chapter in my life of discovering the green subculture has (mostly) ended. Living green on a budget has changed from the thrill of discovery to habit. This blog remains in rememberance- with occasionally crossover posting. I hope you join me- the same green mama on a budget, in a new blog celebrating life's daily experiences- LIFE O'KAY Still lots of crafts & crunchiness- with even more sweet family moments.

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