EMS and Fire personnel working 24-hour shifts have a unique challenge that the majority of the general workforce doesn’t understand: The short pay period. For me, this occurs every 3 pay cycles. For other schedules, it may occur every other pay cycle. For many of us, we have learned to either work an extra shift during that pay period, or pay larger bills like our rent or mortgage out of the bigger check. These may seem like simple solutions, but those of us that have dealt with this know that one unexpected expense can completely derail this system.
What if it didn’t have to be this way? What if it didn’t matter when we got paid? Could you imagine having all the money to pay your bills for the month at the beginning of the month? You heard me right. I’m talking about looking at your account on the first of the month and having every single penny you need to make rent, utilities, cell phone bills, groceries, insurance, etc. No, I haven’t lost my ever-loving mind. In the budgeting world, we call this building a one-month buffer, and it’s very doable on any salary, including EMS and public safety.
Stay with me, my friends. I’m about to show you how!
Get on a Budget
OK, this should be obvious by this point, but I need to make it crystal clear: You need to be living on a written budget. There is just simply no way you are going to accomplish this without living on a written budget. If you’re new to my #MoneySmartMedics series, then check out part 3 of my “getting started” series for help on getting your first budget started.
I would also HIGHLY recommend checkout out YNAB (You Need A Budget). It’s a money management and budgeting program that I have been using for quite some time now and it makes doing all this budgeting stuff actually fun. Of course, anything I teach here is 100% usable whether you’re using money management software or not, so don’t stress it if you’re not ready to dive into something like YNAB. However, if you are ready, using the link I provided will pre-load you with a 6% discount on your purchase. You can also try their software for free for 30 days.
Regardless of what you use, just get on a freaking budget!
Do the Math
You need to figure out exactly what your monthly expenses are. This includes things like gas, groceries, monthly bills, etc. Now, I know monthly expenses can change from month to month, but that won’t matter for this step. You just need a rough estimate to get started. By the time you completely build up your buffer, you will have mastered your budget.
If you are brand-new to budgeting, then I would recommend checking out part-2 of my “getting started” series, where I talk about getting organized and lowering your monthly expenses as much as possible. Once you have all your ducks in a row, then you’re ready to go to the next step!
Setting up Your Buffer
This is actually rather easy and it can be done on ANY income. All we are going to do is save up an entire months worth of expenses. Once again, I’m not crazy. Anyone can do this, it’s just a matter of how much time it takes. If you don’t have a lot of money to spare, this process may take a while. If you can cut your expenses down and put some decent money away, you can finish your buffer in a matter of a couple months.
Remember how I said you need to figure out what your total monthly expenses are? OK, that’s our goal for now. This number may change as you start to master your budget along the way, but it won’t matter because the important part is, you’ll be putting money away! The best way to do this is to figure out the maximum amount of money that you can put away for your buffer every pay check. Whatever the amount is, do the math and figure out a date that you’ll be fully funded. This will help keep you on track give you something to look forward to. If you’re using YNAB, this can be accomplished using a budget category. If you’re budgeting with a pen and paper, I would recommend taking the money out or putting it in a separate account until it’s fully funded.
Putting Your Buffer to Work
Here is the fun part! Once you have an entire month’s worth of expenses saved up, then you can pay all your bills on the first of the month (or at least have the money on hand for them). Now, since all your bills and expenses are covered, you won’t have to worry about what bills get paid out of what paycheck. Now, you take the money from your paychecks this month and use them refill your buffer for next month. This way, on the first of the next month, you once again have all the money on hand to pay your bills. Make sense?
Think of it this way…
Imagine that you have 2 batteries for your cell phone (do they even make detachable batteries anymore?). You take off for the day with one fully-charged battery in your phone while the one you used yesterday is charging at home. By the time you get back home, your battery is now fully charged and you can swap batteries and repeat the cycle. Well, imagine your battery as your monthly buffer. You start the month with a fully-funded budget. Now, while you’re spending your monthly budget, your paychecks are acting as the battery charger for your buffer. Come the first of the next month, you now have a fully-funded budget once again and the cycle repeats. This, my friends, is what we call breaking the paycheck-to-paycheck cycle.
This is EXTREMELY liberating. Trust me on this, it’s worth the amount of time it takes to build it up. Even if you can only put 5$ away each paycheck, at least start there and work your way up to saving more. This will eliminate 90% of the stress that comes with working the pay-cycles that we do. When you commit to budgeting, it’s like getting a pay raise without getting a raise. Don’t believe me? Then try it!