There isn’t one budgeting style that works for everyone. Bi-weekly pay and semi-monthly pay comes with some additional budgeting challenges that monthly budgeters don’t have to think about. Don’t worry though, with a little planning and organization you can become a semi-monthly and bi-weekly budget rockstar in no time!
Let’s get started, shall we? Throughout this post, we will be following Betty and Joe. Keep in mind that everyone’s financial situation is different and this is just one example.
Create a monthly projection first.
You may be thinking that I’ve already ignored your pay frequency, but I haven’t. By writing down your entire month of income and expenses first, you’ll be able to make a plan for each pay period without wasting time trying to figure out your complete financial picture later on in the process.
Here are the items you’ll need to list before you create your bi-weekly budget:
- Total income (after-tax and paycheck deductions)
- All fixed expenses (bills & utilities)
- Any variable expenses (general spending)
- Minimum payments for all debts
- All savings contributions (sinking funds, after-tax retirement contributions, emergency funds, etc)
Regardless of what method you choose to craft your budget, make sure to include the pay dates and due dates for all bills.
Check to see if your expenses are greater than your income.
If your monthly expenses are greater than your income, look for ways to cut or eliminate expenses and/or find ways to increase your income.
When we started budgeting, we cut out everything we could live without. This included cable, our 2nd car, hair stylists, nail salon appointments, magazine subscriptions, etc.
If your expenses are less than your income, congrats! You can still follow the steps above if you want to increase the amount of money you’ll be able to direct towards the things that matter to you.
Even after becoming debt-free, we still look for ways to save or cut costs. The fear of being broke again keeps us motivated to spend intentionally but we definitely have loosened the reins a little bit.
Plan your bi-weekly budget out per paycheck.
Many of you may normally receive 2 bi-weekly paychecks per month. Then, 2 months out of the year you receive a “bonus 3rd paycheck”. I personally recommend that you budget based on 2 paychecks and then use those “extra” paychecks to beef up your emergency savings, pay down debt or save for large expenses.
Sorry for the semi-monthly budgeters out there, you always receive a paycheck on the 1st and 15th – so that means no extras 😞.
Here’s a snapshot of how this would look in our bi-weekly budget template:
Click here to learn about the best biweekly & semimonthly budgeting spreadsheet available right now! Use code “
Not enough money to cover the expenses during a particular period?
- Contact companies to see if you can change your bill dates.
- Split bills up over multiple paychecks.
- Allocate full amount for certain bills in another period.
As you can see below with Betty and Joe, their $1,200 rent is due by the 5th but that would take up 50% of their income in the first half of the month. In order to even out their budget, they decided to split the rent over the 2 pay periods.
It’s important to keep in mind that in order to do this approach, you’ll need to have the full payment for the current month to cover the bills that you choose to split going forward.
If you’re starting your budget in the middle of the month then you’ve already paid your large bill and can just start splitting them in order to provide yourself with some relief. If this is confusing, don’t hesitate to email me.
How to stay on track when budgeting bi-weekly paychecks.
It doesn’t matter what your pay frequency is, staying on track once you do create a budget can be hard. Here are a few things that I recommend you do in order to stay on track and achieve your goals:
1. Set up a separate bill account.
Guys and gals, setting up a separate bill account changed our lives for the better. This not only keeps you from spending your rent money on a quick getaway, but it also keeps companies from auto drafting funds out of the account where all of your money is deposited.
Make sure to choose a bank that doesn’t require minimums so you aren’t paying extra to have another account. I’d also recommend that you keep a buffer in the account so that you don’t overdraft ;).
2. Track your variable expenses.
This is the part where folks want to fight me or give up on budgeting altogether, but I swear tracking your spending will help you know where your money is going.
I prefer to use the Goodbudget app but I’ve also tried
3. Adjust your budget as needed.
At the end of the month, you’ll input your actual spending and income into your bi-weekly budget or semi-monthly budget template (or another document) and this will provide you with an overview of what needs to be adjusted going forward. We don’t want to spend more than we make, like ever, but living below your means can help cover those “Oh crap” months if they happen to occur.
Remember, it takes 3-4 months to create and fine-tune a budget that actually works for you. Even after that time frame, things may still pop up that will need to be addressed in your budget. This is why it’s so important to make sure you at least have the basics covered so emergencies are simply inconveniences.
Financial Extra Credit
So, now that we put our weekly budget together, what’s next? Glad you asked!
I challenge you to make a plan for accomplishing the things below in order to make managing your money each month as painless as possible.
Start small and work your way up. Rome wasn’t built in a day and your bank account won’t start overflowing in a day either.
- Get one month ahead on your expenses
- Save an emergency fund
- Pay off high interest consumer debt
***
That’s all Wealthy Fam! I really hope this helps you get started budgeting your money. Please remember to be patient with yourself while you work on following your semi-monthly and bi-weekly budget.
I still want to throw my budget out the window every now and then but I’ve learned that keeping your goals in the forefront of your mind helps to ease the frustration.
Click here to learn about the best biweekly & semimonthly budgeting spreadsheet available right now! Use code “
$tay Wealthy Fam,
— Dannie
There isn’t one budgeting style that works for everyone. Weekly pay comes with some additional budgeting challenges that monthly budgeters don’t have to think about. Don’t worry though, with a little planning and organization you can become a weekly budget ninja in no time!
Let’s get started, shall we? Throughout this post, we will be following Betty and Joe. Keep in mind that everyone’s financial situation is different and this is just one example.
Create a monthly projection first.
You may be thinking that I’ve already ignored your pay frequency, but I haven’t. By writing down your entire month of income and expenses first, you’ll be able to make a plan for each week without wasting time trying to figure out your complete financial picture later on in the process.
Here are the items you’ll need to list before you create your weekly budget:
- Total income (after-tax and paycheck deductions)
- All fixed expenses (bills & utilities)
- Any variable expenses (general spending)
- Minimum payments for all debts
- All savings contributions (sinking funds, after-tax retirement contributions, emergency funds, etc)
Regardless of what method you choose to craft your budget, make sure to include the pay dates and due dates for all bills.
Check to see if your expenses are greater than your income.
If your monthly expenses are greater than your income, look for ways to cut or eliminate expenses and/or find ways to increase your income.
When we started budgeting, we cut out everything we could live without. This included cable, our 2nd car, hair stylists, nail salon appointments, magazine subscriptions, etc.
If your expenses are less than your income, congrats! You can still follow the steps above if you want to increase the amount of money you’ll be able to direct towards the things that matter to you.
Even after becoming debt-free, we still look for ways to save or cut costs. The fear of being broke again keeps us motivated to spend intentionally but we definitely have loosened the reins a little bit.
Plan your weekly budget out per paycheck.
Many of you may normally receive 4 weekly paychecks and then get a “bonus 5th paycheck” 2 months out of the year. I personally recommend that you budget based on 4 paychecks and then use those “extra” paychecks to beef up your emergency savings, pay down debt or save for large expenses.
Here’s a snapshot of how this would look in our weekly budget template:
Click here to learn about the best weekly budgeting spreadsheet available right now! Use code “
Not enough money to cover the expenses during a particular week?
- Contact companies to see if you can change your bill dates.
- Split bills up over multiple paychecks (weeks).
As you can see with Betty and Joe, their $1,200 rent is due on the 5th but they only bring in $1,100 in week 1. They decided to put aside $400 week 1 – week 3 to cover the rent for the upcoming month.
It’s important to keep in mind that in order to do this approach, you’ll need to have the full payment for the current month to cover the bills that you choose to split going forward.
If you’re starting your budget in the middle of the month then you’ve already paid your large bill and can just start splitting them in order to provide yourself with some relief. If this is confusing, don’t hesitate to email me.
How to stay on track when budgeting weekly paychecks.
It doesn’t matter what your pay frequency is, staying on track once you do create a budget can be hard. Here are a few things that I recommend you do in order to stay on track and achieve your goals:
1. Set up a separate bill account.
Guys and gals, setting up a separate bill account changed our lives for the better. This not only keeps you from spending your rent money on a quick getaway, but it also keeps companies from auto drafting funds out of the account where all of your money is deposited.
Make sure to choose a bank that doesn’t require minimums so you aren’t paying extra to have another account. I’d also recommend that you keep a buffer in the account so that you don’t overdraft ;).
2. Track your variable expenses.
This is the part where folks want to fight me or give up on budgeting altogether, but I swear tracking your spending will help you know where your money is going.
I prefer to use the Goodbudget app but I’ve also tried
3. Adjust your budget as needed.
At the end of the month, you’ll input your actual spending and income into your weekly budget template (or another document) and this will provide you with an overview of what needs to be adjusted going forward. We don’t want to spend more than we make, like ever, but living below your means can help cover those “Oh crap” months if they happen to occur.
Remember, it takes 3-4 months to create and fine-tune a budget that actually works for you. Even after that time frame, things may still pop up that will need to be addressed in your budget. This is why it’s so important to make sure you at least have the basics covered so emergencies are simply inconveniences.
Financial Extra Credit
So, now that we put our weekly budget together, what’s next? Glad you asked!
I challenge you to make a plan for accomplishing the things below in order to make managing your money each month as painless as possible.
Start small and work your way up. Rome wasn’t built in a day and your bank account won’t start overflowing in a day either.
- Get one month ahead on your expenses
- Save an emergency fund
- Pay off high interest consumer debt
***
That’s all Wealthy Fam! I really hope this helps you get started budgeting your money. Please remember to be patient with yourself while you work on following your weekly budget.
I still want to throw my budget out the window every now and then but I’ve learned that keeping your goals in the forefront of your mind helps to ease the frustration.
Click here to learn about the best weekly budgeting spreadsheet available right now! Use code “
$tay Wealthy Fam,
— Dannie
This statistic hits close to home for us because we lived like this early on in our marriage. Before we started working on changing our financial life, we struggled to make it from one pay period to the next.
78% of about 126 million U.S. families is a large number, so we know that we aren’t alone. Here are some tips that helped us escape the paycheck to paycheck cycle:
1.) Assess Your Financial Situation
Before you can really take control of your money and change your financial future, you have to figure out where you are right now. It might seem like a daunting task, but you’ll need to sit down and lay out your entire financial life.
Essentially, you will be figuring out: Income – Monthly Expenses – Debt Payments = ???
Hopefully, the remainder is a positive number. That means your income completely covers everything you spend each month.
If it’s negative or very close to $0, you’re possibly stretched thin and putting your excess spending on credit cards or some other type of debt (like we were 😞). That is usually why people continue living paycheck to paycheck and stay trapped in the destructive debt cycle.
2.) Create a “Paycheck to Paycheck Budget”
Once your situation is laid out in front of you, you’ll need to create a plan. Creating a budget is the next logical step.
But here’s the thing:
Not all budgets are created equally.
Most advice would say a ‘monthly budget’ is all you need, but in reality, if you’re living paycheck to paycheck you actually need something different.
We didn’t realize it at the time, but we were budgeting by paycheck within a monthly budgeting spreadsheet we had created. It was ugly and slightly complicated but the overall process really helped us manage our finances.
In order to budget by paycheck, you need to know when you’ll be paid and when all of your expenses are due.
Monthly budgeting systems don’t normally account for this in most cases. Usually, they only show the month as a whole and don’t break things down by pay period.
Thankfully, Dannie created a “Biweekly/by Paycheck Budgeting Spreadsheet” that can help you with this!
Timing is everything, so having the ability to actually see everything split up on one screen is liberating. This is literally the easiest way to see where you have mismatches so that you can adjust when some of your monthly expenses are paid in order to free up extra space in your budget between paychecks.
It works. I promise.
78% of Americans live paycheck to paycheck. This budgeting method can change that!Click To Tweet3.) Track Your Monthly Spending
Once your budget is created you HAVE to track your spending throughout the month. Whether you carry around a pen and paper or use some type of mobile app, tracking your spending is imperative.
The reasons for this are two-fold:
- It helps you actually stick to your budget throughout the month
- It gives you the ability to compare your actual spending to your budgeted spending
There will be times where you’ll go over budget or your expenses might change unexpectedly. Cut yourself some slack, because it happens to the best of us!
But, the only way you’ll know that this is happening is if you’re actually tracking your expenses. After a few months of budgeting and tracking everything you’ll be able to determine if you need to start looking for ways to:
- Increase your monthly income
- Decrease your variable spending
- Get rid of some expenses altogether
4.) Don’t Give Up On Yourself
Perhaps, the most important part of this whole process is your mindset.
Keep your goals in mind and believe in the fact that things will eventually get better for you. When we were living paycheck to paycheck we never imagined we’d be able to:
- Clear $130,912 worth of debt
- Get one month ahead in our finances
- Increase our credit scores to 800+
- Purchase a home in California
We also had to learn the importance of not comparing our financial journey to anyone else’s. You may struggle with this now, but I assure you that persistence is the name of the game. Enjoy the process and ALWAYS give yourself credit for what you’ve done already!
Continue to educate yourself on different tips for managing your finances and use the methods that make the most sense for you!
***
I sincerely hope that this breakdown made sense. With so many many families living paycheck to paycheck, we know that this is a problem many of us are likely to face at some point in our lives.
If you currently struggle with living this way, please use the tips I’ve provided above to start making real progress and give some serious thought to trying out our new “Biweekly/By Paycheck” Budgeting Spreadsheet!
$tay Wealthy Friends,
–DJ
Here are 5 simple steps to help you create a monthly budget in less than 20 minutes.
In Part 1 of this series, we talked to you about Assessing Your Financial Situation. Doing everything that we mentioned in that post will allow you to complete steps 1 – 3 in the budget creation process.
In case you haven’t read Part 1 yet, you’ll need to:
Download Our Budget & Debt Tracking Spreadsheet!
1. Write down your TOTAL monthly income
2. Figure out what your monthly expenses are (Fixed, Variable, and Debts)
3. Calculate the difference between your income and expenses
The number that you get in step 3 will tell you what your spending habits currently are. A negative number means that you overspend and a positive number indicates that you should have extra money left over at the end of the month.
When you create a monthly budget (and actually follow it) you can dramatically increase the positive number that should be left when the month is over. You can do this easily by adjusting what you decide to spend your money on each month.
4. Revise Your Budget Items
After completing Step #2, you’ll be able to see exactly where your money is going each month. At this time, you’ll have to go through each section in your budget tracker and decide what is truly necessary.
If it isn’t essential, it needs to go!
Fixed Expenses
Look at what you have in your “Bills & Utilities” category. This section might be harder to revise because most of the items are probably essential for your everyday living. But, there might be some areas where you can cut out or reduce certain expenses. Read: How to Determine Budget Percentages
As a rule of thumb, housing costs (rent or mortgage) should be somewhere between 20 – 35% of your monthly income. If your costs are much higher than that, they can put a serious strain on your budget. Consider whether or not you can refinance your mortgage, renegotiate your rent or relocate altogether.
Your utility expenses (gas, electric, water, trash, telephone) should be in the 4 – 7% range. We cut a lot of unnecessary things out of this part of our own budget in this section. We canceled our cable subscription, lowered our internet speed, changed phone providers, canceled magazine subscriptions & various other things.
The lesson we learned was:
Cutting expenses have the same effect as increasing your income.Click To TweetVariable Expenses
In all honesty, the amount that you typically spend on variable expenses is where you’ll most likely be able to cover the most ground.
This is due to the fact that YOU directly control the amounts that will be spent on the items in this category.
For instance:
If you currently spend a significant amount on groceries/eating out, make your budget a realistic amount and spend ONLY that. And by realistic, I mean don’t try to say that you’re budgeting $20 to feed your entire family for the month.
Rules of thumb: Food costs (at home and away) should be 15 – 30% of your take-home pay. Transportation costs (car payment, gas, insurance, repairs, or bus fare) should fall somewhere between 6 – 30%. Entertainment costs should be 2 – 6%.
Savings
Our financial journey started shortly after my mother passed away and we couldn’t afford plane tickets for her funeral. Statistically, 6 out of 10 people can’t afford a $500 unexpected expense and we were one of those 6 people. To help you avoid a similar situation, you should include saving for an emergency fund in your monthly budget.
Initially, save at least $1,000 and then increase that amount based on your particular circumstances. Do this BEFORE you start making extra payments on your debt!
Debt Repayment
A large part of your focus will go towards paying off any outstanding debts that you have. There are various strategies for paying off debt (like the ones we’ll cover in Part 3), but first, you have to make sure that you’re at least covering the minimum monthly payments for each debt before you start allocating extra money to pay them off faster.
Don’t rob Peter just to pay Paul.
5. Track Your Expenses Throughout the Month
During this process, keep in mind the fact that your budget is not the boss. YOU are telling your money where you want it to go, you’re just using the budget to give the directions.
At any time, you can make adjustments if you miscalculated what you need or if you simply budgeted too much in a category.
How will you know when your budget isn’t adding up?
You’ll have to keep track of what you’re spending throughout the month to see how your actual spending compares to what you’ve budgeted. We suggest using apps like Goodbudget or EveryDollar and inputting your actual totals into the spreadsheet that you downloaded from us at the end of each month.
Once this is done, you can compare the difference. If your end of month totals are higher than the budget then you spent too much. Either you were just being reckless with your spending or you misjudged what you actually needed to spend.
Your budget should be an on-going process. Don’t think that you can just create it and leave it the same forever.
Sit down & review your budget EVERY month. Put it on your calendar and set aside time for this because it is extremely important for your financial journey.
Keep your budget up to date and make adjustments whenever your income or expenses change.
***
With your newly created budget, you should be able to start having money leftover at the end of the month instead of realizing that you have money missing. This will put you in the perfect position to start aiming for your financial goals! Following a budget was a major part that helped us pay off $130,912 worth of debt and become debt free.
In Part 3 of our series we are going to cover “The Best Way To Pay Off Debt”. We’ll be talking about the difference between two of the most popular debt payoff methods.
Stay Wealthy!
— DJ
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