My husband took a new job last month- one that switched us from twice a month paychecks to every 2 weeks. It’s been a bit of a change for my budgeting so I thought what a better time to re-share how I budget on this always changing schedule!
Here is how I budget:
- Budget off 2 checks a month. Some months you will get 3- but you will always get at least 2. Always budget on the least amount of money you expect a month. Always better to be UP income than DOWN.
- Put as much in the starting “bucket” as possible. Whatever money you can start off your budget with- the better. This gives you a buffer so if several bills are due on the 10th but your check doesn’t come in until the 12th you have a buffer to protect you from overdrawing.
- Pad your savings. That third paycheck you get a few times a year? Put it into savings. Pretend you never got it. This will help build that buffer even stronger. If you have a strong budget you won’t “need” that third paycheck to cover the bills.
I set aside a certain amount from each check to cover the “big” bills, like the mortgage. Get a calendar and estimate your bills. Highlight paydays and write in the amount you expect (again estimate the lowest amount you’d expect) and then write the due dates of each bill (over estimating if necessary). I’ve put a made up example below with made up numbers and bills.
This allows us to visualize what each paycheck needs to cover. It really worked well for us! I love using a white board calendar because it saves paper and allows me to change things quickly!
A few other tips:
- For example if our mortgage is $1,000 I’d put $500 aside (mentally or into another account) to cover 1/2 of the mortgage. When we got the second check- it was easier to pay because I had already set aside half.
- Another tip (ONLY if you are disciplined enough) is to use a credit card for all the bills (especially one that offers rewards!) – have all the bills you possibly can run through the card and then you only have one (probably a big one) payment to make a month. It makes it easier to pay one big bill after you’ve already gotten both checks. We’ve actually earned over $4,000 in rewards by running ALL our expenses (even hubby’s reimbursed ones from his job!) through a credit card in the last two years. Many credit cards will give you bonus points when you sign up.
- Another suggestion is to have multiple checking accounts at the same bank (I strongly recommend credit unions! I love the ones I use). I keep one for every day spending, one for long term bills, one for short term bills.
Everyday spending has my grocery money, gas money, and bills I’ve scheduled to pay. Long term bills account has money set aside for things that will be coming up (like income taxes, car insurance, etc) and short term bills holds 1/2 of the mortgage payment each month, and other expenses that are coming within 30 days.
I used to use savings accounts but several years ago a new requirement came out about the number of transfers allowed (check with your bank on transfer and withdrawal limits) so I decided to simply use checking accounts. I love my credit union because there are no fees for them because we have direct deposit.
I like to use these bill organizers because it lets me see at a glance what is coming up:
I’d love to hear your suggestions for budgeting!