Updated on 09.01.10

Musical Bills b/w Treading Water

Trent Hamm

Katie writes in:

The article on budgets was *great.* I’ve long felt guilty for not doing the whole formal budget thing, especially since I always liked and did well at math. (Like you, however, spreadsheets cause my eyes
to roll back in my head.)

But here’s a question/comment on one bit. You said: “First, this doesn´t work if you´re already spending more than you make. That type of behavior is not sustainable. If your credit card balance is going up each month, no amount of budgeting or planning matters until you´ve reached a point where that credit card bill goes down each month.”

We don’t have ANY credit cards, so that’s not a problem. To be honest, I doubt if any credit card company would give us the time of day. (I do want to get a secured card at some point, with the goal of rebuilding a bit of credit.)

But we’re currently at a stage that’s a variation of what you described. Since we can’t use a credit card, we often wind up playing a sort of “musical-bills” game with such things as our electric, water, gas, trash, phone and so on. By this I mean that we will either skip a month of paying one of them, or make a short payment on one or more. The next month, we try to catch those up, but sometimes then need to repeat the process with another bill going short.

Occasionally we get a small windfall: selling something, or a gift of cash for a birthday, or the like. This usually goes into making sure *everything* is 100% current… which is a wonderful feeling! But then comes a month (such as this one) where the power bill is extra-high, or gasoline prices spike just as I need to make several trips into the city for doctors’ visits. When that happens, all too often the following month begins the cycle once again.

Beyond the standard advice on cutting back as much as possible, or earning more, do you have any particular suggestions to help get us off the merry-go-round? I know the best solution is to have more coming in, and I am hoping (now that my medical issues are being dealt with properly!) I can get back to writing and actually SELL something again. But meanwhile, treading water has gotten rather old.

Many people find themselves at this “treading water” stage and are unsure how to get past it. Basically, it amounts to spending almost exactly what you earn, with the irregularities from month to month causing trouble.

The solution here is usually just a few pebbles on one side of the balance or the other, just enough to cause the tipping to begin.

Where can you get those pebbles from?

A bit of extra income This is the perfect type of situation for some small-scale earnings online doing things like Mechanical Turk (see my notes about it) while you’re watching television or relaxing in the evenings. You’re not really looking for a job per se, but something that can earn a little bit whenever you have a few spare minutes to work.

A bit of extra diligence You don’t need to make radical cuts. You just need to be a little bit extra diligent when it comes to your spending. When you’re standing at the checkout line, make the conscious choice not to buy a pack of gum or a People magazine, for example. Get just a sandwich and a water cup without the value meal – you don’t need the fries anyway. Then feel good about the little choices you made – and watch as they slowly add up to a better balance at the end of the month.

A bit of sharing Go in with a friend or three and get a membership at a bulk-buying warehouse. Go there to buy your toiletries and split the cost on jumbo packs. Buy a four pack of deodorant, each of you take one of them, and reduce your deodorant cost by about 30%. Do the same for paper towels, toilet paper, milk, garbage bags, and countless other things. Go beyond that and share larger things with your friends – you don’t both need a toolkit. Just put tools in one kit and pass it around as needed, for example.

A bit of self-improvement Spend your evenings learning about the things you’ve always been curious about. Check out books from the library on it, or surf through Wikipedia on the topic. Try doing the things you learn about. Learn about a topic – and learn how to learn, as well. You’ll come out of it with more knowledge and perhaps more skill – and it won’t cost you a thing for entertainment.

A bit of mutual support Support your partner when he does things that are financially smart. Reinforce the idea that spending less is the good thing to do. You’ll find that with people around you supporting this kind of behavior, particularly the people you spend the most time with, it becomes more natural to spend less money.

A bit of friendship This attitude spreads to your closest friends as well. Don’t be afraid to admit that you’re having financial challenges. Be willing to talk about money with them and encourage each other to make better choices. Engage in non-expensive activities together – most activities are made fun by the people you do them with anyway.

Many situations are made a lot better by doing just a little bit of a lot of different things.

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  1. George says:

    Katie – it sounds like you’re seeking a miracle cure, but there are no substitutes for buckling down and giving yourself a savings margin. Stuff happens, so budget extra for that stuff. Give up some regular expense, like cable TV, for awhile so you get the money banked.

  2. valleycat1 says:

    To put George’s comment another way, since you’re living so close to the edge, you need to look closely at what your highest bills are (if your electric bills spike in the summer, that’s going to keep happening) & you need to have some $ in reserve to cover that. If you have a cell phone or two, rather than a bare minimum land-line account, then the cell phones need to go until you’ve got the money.

    A few more temporary ‘pebbles’ – shop from your pantry/eat from the supplies you have on hand with a few perishables to round out the meals; shop around for the least expensive gasoline in your area; use free internet at the library & drop internet from home for awhile. It sounds like you really need to pare back to the minimum frills for a short time to give yourself some breathing room. It’s well worth it in the long run, at least until you have more income coming in or can figure out long term cuts.

  3. Kat says:

    Beyond spending less or earning more … um, learn to be really really good at stealing money?

    Seriously, get out of lala land in which you have extra money without earning more or spending less.

  4. cynthia says:

    Look to see what community resources are available to you and use the ones that you need. You may try to contact your City Concilman or the United Way or even the public library to see if they know of help. My community has a food bank that people who need help can use to obtain food for no cost. There may be help with medical bills, too. And, your power company may have some type of “budget billing” option that would even out your energy bills over the course of a year. Good luck!

  5. lurker carl says:

    I think Trent tiptoed around the basic issue here. Radical cuts ARE needed to get the bills consistantly less than the level of income. A dollar saved here and there isn’t working when bills are short changed and shuffled every month.

    As others have stated, there is no magic involved in spending less than you earn. If you can not earn more then you MUST spend less. Here’s how, based on the few monthly bills you listed.

    Let’s start with the electric bill. If the electric bill spikes in the summer, evidently air conditioning is being used. If you TURN OFF THE AC, the electric bill will not spike. Turn off lights, turn off the TV, turn off the computer. Then unplug everything that consumes electricity. Only plug it in when you use that item, then pull out the plug when you’re done. No phantom electric usage. Make using modern conviences difficult and get that electric bill way down.

    Of course, the exception is your refrigerator. You’ll need to pull it away from the wall and clean all the dust bunnies off the condensing coils. Make that machine run as efficiently as possible. Another way to make the fridge efficient is to keep it well stocked with food.

    Pare back on water consumption. Live as though you carry the water in pails from the river back to your home. In other words, limit your water usage to a dozen or so gallons per day.

    Cancel your trash pick up and split the bill with one of your neighbors. Since you’re minimizing your lifestyle to save on those bills, your trash production should become very small.

    I’ll assume the gas bill is for cooking and heating, not automobile fuel. Since you’re cutting back on water consumption, turn the water heater thermostat down. Heating water is expensive and you’re not going to be using much water anymore. You’ll be cooking more but the water heater savings will more than cancel it out. Learn how to stay warm in the winter without using as much heat from the furnace.

    Ditch the monthly phone bill. Get a Tracfone and pretend it doesn’t work. Only use it for basic communication, not as a toy. Make those precious minutes last and last and last. Don’t answer the phone unless you know who’s calling, then keep the conversation short.

    If it sounds like you’ll be living like a pauper, it’s because you are one until you get the spending in line with income.

  6. deRuiter says:

    Great post Lurker Carl! Trent mentions a couple of times watching tv at night, sitting around. DON’T WASTE TIME; ONE OR BOTH OF YOU NEEDS A PART TIME JOB. There is no magic bullet, you need to ‘spend less and earn more’. This is EXACTLY like fat people moaning that they want to be thin, yet the fat person continues to overeat and refuses to exercise, instead the fatty complains and wishes for a miracle cure. That’s why so many Americans are poor, or fat, they refuse to do the simple steps which would lead to success. Please don’t start that silly, ‘It’s glandular, that’s why I’m fat.’ business because if you look at photos of concentration camps in Nazi Germany or Kosovo, THERE ARE NO FAT INMATES. Eat less calories than you burn and you get thin, spend less than you earn and you have excess money. Follow most of Trent’s advice, reread Lurker Carl’s #5 post, and get a part time job, problem solved!

  7. Mary E.S. says:

    When we were in trouble,I checked with the churches and charities in our area.Most of them have food give aways at least once a month.You have to fill out a paper and let them pray with you but that is all.Not having to worry about groceries frees up more money to pay the bill’s and some of those places will help pay electric or water twice a year.If you make too much money to qualify then it is up to you whether you fudge on that question or not.With two special needs children,I did untill we could get our heads above water and my husband’s job picked back up.I have medical problem’s and am not able to work even if I could find child care.Do what you need to, to get your head above water again and know you are not the only ones that have been there.

  8. aj says:

    We have been in that exact situation for several years which developed my creative money management skills, as I like to refer to them.

    But after finally cutting cable, and scrutinizing all our monthly expenditures to see if there was some way to cut some costs, we finally worked our way up to the point that we do have the money to pay our bills every month. And that feels great!
    I always tease my husband that we are such geeks for getting so excited to pay our bills every month! But it takes so much weight off our shoulders that it is worth all the hard work you have to do to get there.

    I have always loved spreadsheets and the idea of budgets and expense tracking…but I have never been able to keep up with all the data entry. That is what I do all day at work so I don’t want to spend my evenings doing the same! So I gave up on that idea…it was stressing me out too much. The only benefit I did see when I was trying to keep up with it was that I would forego buying something just so I didn’t have to enter it in the spreadsheet…kind of like keeping a food diary – that just wears me out too. I don’t have time to do that, or rather I definitely have BETTER things to do than spend time on that :)

    I did devise an easy way to keep a good eye on all of my spending by using Outright online, which pulls in my paypal transactions automatically & then is very easy to categorize. I use my paypal debit card for everything possible so that catches 95% of our spending.

    I have a “budget” in my head and I know when my bills are due…and the most important of all — we have started an emergency fund for when something unplanned happens. We have had 3 separate minor emergencies that in the past would have really been devestating but now I am happy to dish out the $500 for a car repair because I am just soooo happy that we actually have the $ tucked away to handle the situation.

    It just takes time and changing some habits.

    Peace of Mind is worth so much more than cable!

  9. valleycat1 says:

    Some utility companies will let you pay an average amount throughout the year, based on past year’s bills. So some months you would pay less than the actual total, some months more, but at least you have a set amount to budget for, instead of peaks & valleys.

    Also, don’t rely on your online bank records or ATM reports to see how much money you have left to spend for the month. They don’t take into account bills that still might come in or payments that haven’t processed yet. Religiously record every payment and every dollar of cash spent for awhile to plug any leaks.

    And, if you are making mortgage payments, you may need to seriously consider selling the house & renting a place that’s less expensive – even marginally less might help, as many rents include some or all utilities. Yes, the bank may have to agree to a short sale; sometimes you have to miss a certain # of payments to get them to agree, but that would be $ in your pocket. OR, if you’re renting, find a cheaper place.

  10. Chet says:

    Just a note…

    You can no longer have a “friend” join Sams or Costco with you and split the cost because both warehouses now require your “friend” to provide id that confirms he/she lives at the same address as you.

  11. Chet says:

    Just a note…

    You can no longer have a “friend” join Sams or Costco with you and split the cost because both warehouses now require your friend to provide id that confirms he/she lives at the same address as you.

  12. Jennifer says:

    @#7 Chet — that may be true, but many will let you go shopping with your friend and you repay what you owe afterwards. At the Costco near me, I go every once in a while with a neighbor, we split our groceries, get a subtotal when my stuff is through, then I write a check for that amount.

  13. Geoff Hart says:

    When you have a low income, sometimes all you can do is tread water and hope for better times or a better job. But I know so many people who have good incomes but really don’t save any money that I find most often it’s a problem with priorities, not with income.

    If you’re spending everything you earn, the only way to save money is to cut costs, and that requires self-discipline and sometimes a bit of pain. You don’t have to give up these expenditures immediately, just scale back a bit. If you eat out at restaurants a lot, reduce the frequency by half; if you go to movies regularly, only go on half-price days or cut the frequency by half or wait until the movie comes out on DVD (or on TV) and have a movie party at home with friends. If you have the deluxe cable TV package, scale back to basic cable. Then grit your teeth and stick to this plan for a month or two; by the end of that time, it’ll become habit and it won’t be so painful.

    This isn’t just theory. I work from home, and used to do a lot of between-meal snacking, with the predictable unfortunate consequences for my waistline. I decided it wasn’t acceptable, and cut myself off, cold-turkey. I still allow myself a small snack after each meal, but only one and only a bit. And the results have been pretty good. But the first few weeks, I had to consciously stop myself from opening the cupboard door.

  14. I am in a very similar situation, due to recently diagnosed medical problems, adjusting the medication and then ‘moving on’.
    All the above tips are great. We cancelled our cable, we do the opposite since we run a business and mostly use our cellphones and have a cheap VOiP line which we mostly use for faxes, etc. Another thing not mentioned if you are also self-employed in any capacity is look for cheaper/free ways to manage your business. We used to spend a couple hundred dollars a month on customer database software, but now we installed a free program and use Google Apps for $100/year. That beats throwing $250 a month at practically the same thing! Instead of printing carbonless paper forms, we found a program we can create them online and then fill it out on our iPhones at the jobsite – which is much more convenient and you don’t have to forget paperwork! It takes research time usually to find these types of things and we all get stuck in ruts. But don’t be afraid to look at alternatives to literally everything!

  15. Debbie M says:

    My first reaction was also that you are dismissing every possible solution when you are looking for ones that don’t involve earning more or spending less. But valleycat1 did have a point about evening out your utility bills.

    I would like to add that you can make changes that are temporary. You can spend less until you get a raise. You can have a no-spending week. You can take on a short-term extra job. Any extra savings or earnings can be set aside to deal with the spiky months. Also, make sure that when you do get windfalls (or below-average petrol or utility bills) and you are already caught up, do set that aside for future months.

  16. reulte says:

    Like Kat says, there’s no way to change your finances without changing the income or expenditures. Remember the definition of insanity – doing the same thing and expecting change? Therefore, you WILL have to change comething in your equation to ensure a better balance.

  17. Marie says:


    I’m in the same sort of situation as you, but one step ahead. No big credit bills, but just breaking even and any little “emergency” has a huge impact. Borrowing from the Peter bill to pay the Paul bill is a sure sign you’re living over your income. I’m now on the path to fixing this, and can give a few tips on what’s currently working for me.

    1. Track everything you spend for 3 months, and try to come up with a budget of what you expect to spend. You’re not going to get it right, but that’s ok. Just adjust. If you use cash, divide it into envelopes for each category so you can SEE what you have left. if you use a debit card for everything, you may not have any clue where your money’s actually going. Use a free service like mint.com or yodlee to track what budget categories those transactions go in, so you can see how much you have left. Only when you can see where your money goes will you know where you can effectively cut out. It takes saying “really? I spent $550 on eating out????” to realize you may need to trim in that area. Once you know what you REALLY spend, you can make up a real budget that you may stick too. Make sure it includes an emergency fund.

    2. When you go to do or buy anything, ask yourself: is this really necessary? Is this the adult, responsible me who needs this item, or is this the little bratty kid inside me that’s trying to be lazy or get a new toy or get back at someone? Be honest with yourself. If it isn’t the adult thing to do, and saving that money could get you to your adult goals, be a good mom to your inner child and leave the item alone. Reward yourself (non-monetarily) for your good deed, or set that money aside and see how it grows. I learned this one from the GOOD book (thegetoutofdebtbook.org).

    3. I’ve been having some good success with YNAB, a software product for budgeting. Actually what I like most, which is free, is their rules of budgeting that the software is based on. You work to save up a whole month of income so you’re always spending last month’s earnings, not this month’s earnings. This reduces a LOT of stress about money, and you can roll with the punches without fear. I’m trying to set aside 10% of my earnings each month. I haven’t hit that 10% target yet (always emergencies, which shows I need to reduce some more spending in my budget to compensate), but at least I’m putting something away. I’m hoping to be there within the next 12 months.

  18. Are you tracking your expenses and income? See if you can pull together six months’ worth of data on the finances. Old bank statements might be enough to work with. Six months of records will pull up the quarterly and twice-a-year bills.

    Then run those numbers against the budget-o-meter charts at crown.org.

    Medical bills are no fun and that may well be what’s throwing everything off. But the Crown budget percentages will help you see whether something else is contributing to the problem.

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