海角大神

Every so often, I鈥檒l get a question like this one, from Gina:

I am a federal employee and I get my paycheck every two weeks but all of my bills are monthly. What鈥檚 an easy budgeting system?

This is a pretty consistent problem, actually.聽Many聽employees receive their pay on a weekly or biweekly schedule. Meanwhile,聽most聽bills come on a monthly basis, some even less frequently.

How do you easily reconcile the two and take on a budgeting plan?

This is a problem I had to deal with in the past. Prior to 2008, I was employed in a situation that paid me every two weeks. It was a bit of a struggle to find a good balance between the paycheck and the monthly bills. My wife was also on a biweekly system, but her paydays were on different days than mine.聽

Here鈥檚 how we handled it. This system works well regardless of how often you鈥檙e paid, as long as that pay isconsistent.

First of all,聽we mostly just used a very straightforward monthly budgeting system.聽We didn鈥檛 do anything strange or unusual in terms of our budgeting. We actually used something very similar to the budgeting templates found in聽听辞谤听聽to get us started. Similar budget templates are found in many other personal finance books.

We made a few adjustments in accordance with the specific needs of our lives, as everyone does when they try to take on a ready-made budgeting scheme. We had to figure out how much we needed to save each month for our irregular bills, for example.

Still, that straightforward kind of budgeting system really worked well for us. So, where did the biweekly (or weekly) checks come in?

Our total amount that we budgeted with each month was the total of just two of each of our checks.Since we were each paid on a biweekly basis, we used two of my paychecks and two of her paychecks as the basis for our budgeting. Our monthly spending and saving plans were all based on that amount.

Of course, over the course of a year,聽we received more checks than that.聽A person who is paid biweekly receives 26 checks per year, whereas a person who is just budgeting using two of those checks every month only accounts for 24 checks. That leaves two left over. Similarly, a person who is paid weekly receives 52 checks per year, whereas a person who is budgeting using four checks per month is only accounting for 48 checks, leaving four left over.

Those 鈥渓eft over鈥� checks were used strictly to push us ahead financially.聽At first, we used them聽entirely聽for debt repayment. Four times a year 鈥� twice due to my 鈥渆xtra鈥� check and twice due to her 鈥渆xtra鈥� check 鈥� we made a giant extra payment on a debt. This did聽not聽affect our normal monthly budget except for how it paid off debts, because we accounted for a certain amount each month as our 鈥渄ebt snowball.鈥�

This system works regardless of how frequently you鈥檙e paid聽as long as you鈥檙e paid a consistent amount. What if your pay is inconsistent? I鈥檇 suggest聽, because it can be really tricky, especially at first.

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