The leveler account
The leveler account
There are periods in your private budget year that you have more resources, and periods when you have less resources. This fluxuation between feeling rich and poor can be an emotional roller coaster. But there is a trick that will make your financial feelings more consistent throughout the entire year. Introducing... the leveler account
As the frequent reader already should know, I operate my personal budget with a plethora of actual bank accounts. There is a reason for this, of course, and that is to insure that the appropriate funds have been secured and are not accidentally spent on something else.
My newest addition to these accounts is the splitting of the regular bill payments and the irregular-but-expected payments. That is, funds for bills that I pay every month for the same amount goes into one account labelled "Regular bills".
Bills that are variable from month to month, such as electricity, and bills that are regular-but-not-monthly go into the "Leveler account". So basically, I have made an estimate as to what I will end up paying in total for the entire year.
From the year total, I find out what the average cost per month is. Every month, I put this average cost into the account. So on months that the payments are less than the average, the remainder accumulates in the account. On months that the payments are greater than average, the accumulated remainder will take care of it.
The name of the account does what it is called: The graph line of available funds throughout the year will be more level.
Of course, this accuracy of this system will only be as accurate as you can predict the year. And as your priorities change, so will the budget. This is inevitable. But another thing that is inevitable, is that in some parts of the year, you have more bills to pay than others, in which case you feel poor and panic about your finances. By implementing the leveler account, you can avoid, or at least greatly reduce the impact these periods have on your life and allow you to have a more consistent lifestyle throughout the year.