In the thread on fiscal responsibility in GD this term came up and it got me thinking - do I live month to month? I like to think I’m fiscally responsible, I don’t have any debt other than my mortgage (which has a good amount of equity in it), I have several thousand pounds saved up and I save every month (not a lot but it’s regular saving, and I intend to increase what I save after my next promotion as I’ll have more disposable income). Whilst I buy my own share of crap like anyone I don’t feel the need to consume all the time, and I don’t believe in spending money I don’t have.
If I absolutely had to I could cut a lot of my spending down but because I’m clear that my budget is balanced and I’ve got a decent safety net I tend not to worry about it too much. I work in the public sector so whilst I don’t have as great an earning potential as some careers, it’s a very stable job, pretty recession proof and comes with one of the best pensions there is. I’m also thinking about branching out into a secondary career right now too to diversify my skills and give me some additional options. I think this counts as “planning for the future”, but I’m the first to admit it’s a fairly vague plan.
Does this sound sensible or am I living fiscally irrepsonibly without realising it?
Living month to month means at the end of each month your checking account goes to basically zero. This includes not saving any money. So you have no reserve or safety net if your incomes drops.
You have money saved, and are still saving? A decent safety net and a stable job? You don’t spend money you don’t have? What a freak!
Sir, you are sitting pretty and I don’t know what else you could possibly do better. You are a man after my own heart, I think you are doing very well. Congratulations, and keep up the good work.
I live month to month. I have to wait until I get paid every two weeks in order to be able to pay any bills. For instance, the first paycheck of the month covers my rent. The second paycheck of the month covers my other bills (electric, phone, groceries, car payment). There is a little bit left over that covers incidentals (gas, extra gallon of milk between grocery stops), but essentially that’s it.
I have to wait until the paycheck comes to pay the bills, there is a lot of creative juggling that happens in order to cover everything, and sometimes, depending upon where the paycheck date falls, sometimes my electric bill or phone bill is paid after the due date, simply because I don’t have it to pay. Twice a year, I have three paychecks in one month (due to 26 pay periods divided by 12 months) and that is when I play catch-up.
If an unexpected bill comes in (car car breaks down, medical expense), that really screws with the plans. I had a heart attack in December, and now I have $30 (co-pays) of prescription costs I had not budgeted for. That came out of the grocery money. I now use candles a lot for lighting the house in the evening; my kids think I do it because I think it looks pretty, but I’m trying to keep the electric bill down.
Not to be a dick, but is that a joke? You aren’t living month to month
[ul]
[li]You have no debt other than mortgage[/li][li]You have a stable job[/li][li]You live in the UK (with more reliable safety nets and health care)[/li][li]You have several months worth of savings[/li][li]You have a positive income, and are spending less than you earn[/li][/ul]
In the US, before the recession hit, the savings rate was -1%. That is living month to month when your monthly expenses come to $1700 and your income is $1600.
Living month to month means that if you lost a month’s income, you’d be screwed.
No, it’s not a joke. In the thread that inspired me to ask this question, people were throwing around statements like having a year’s salary in liquid assets and diversifying their stocks - as I don’t have either of those it made me question whether my fiscal cushion was really as significant as I thought it was. It’s one thing to think “well at least I don’t finance my entire life on credit cards” but that still doesn’t necessarily equal being in a desirable position.
I was both asking for a clearer definition of living month to month and a bit of affirmation. Is that so bad?
Yeah, the OP definitely isn’t living month to month. I’m comfortable now, but lived paycheck to paycheck while I was in university. I had no savings, and usually had to pick and choose which bills I could pay each month. I skipped a lot of meals and ate a lot of ramen. If an unexpected expense came up I was screwed. I drove around in -30C weather with no car window because some thief busted it and I didn’t have the $150.00 it would cost to fix.
It’s soul sucking to live like that. I knew my situation was short term, and I can’t imagine what it’s like to live that way with no end in sight.
I disagree with this. It may be risky, or financially imprudent, but it’s not living month to month. Month to month means you have no money left at the end of the month.
You’re just fine. If you can pay all your bills without a problem and know that if you lost your job tomorrow you wouldn’t be evicted in 30 days you aren’t living paycheck to paycheck. You may not be in the best financial situation but you aren’t in the worst one either.
You came across as someone who was in pretty good condition financially, so worrying if you were living month to month was kindof confusing to me. I associate month to month living as having an unreliable job, no savings and an inability to pay living expenses for a month or so w/o your current job.
My point was that I wasn’t sure what living month to month actually was, so didn’t know if I fit it or not. Possibly I should have just called the thread “What exactly is living month to month?” and left my own economic situation out of it, but generally I think a point of reference is useful.
I’ve been living month to month for few years now, and it’s rapidly getting old. It’s OK when you’re young, if something doesn’t change soon it’s all gonna come to a head shortly. Should be interesting, hmmmm:)
