My weekly budget for last week looked riddiculous at first glance. Without context seeing that I’m spending about $1800 would probably startle even well off people. Why is this amount so high? The answer is pretty simple, I’m playing catch up on one of my bills.
Last month I wasn’t paying close attention to my finances and I missed a payment on my line of credit. By the time I realized this I didn’t have enough money to cover it without digging deeper into debt. So rather than paying a little and hoping I had enough money for my day to day expenses I decided to double pay this month. I called the bank up to let them know and made arrangements for the payment (I highly recommend this if you happen to miss a payment since banks are often gracious if you do and will forgive a single missed payment).
The impact of playing catch up this way is that I have to pay $900 to my line of credit this month and my budget is a bit tight for the rest of the month. Had this been a credit card payment I wouldn’t have had to pay nearly as much but it turned out it was my second largest bill (next to my mortgage).
This is a perfect example of what can happen if you’re not paying close attention to your finances. A simple slip up means that I am now going to have to be very carefull till my next pay. This is also another example of why you need to have an emergency fund. We all make mistakes from time to time and haivng some money saved can help prevent the need to play catch up.