One major stress of budgeting is that no one person gets paid the same way. If you get paid once a month, you have to find ways to make your money last all month long so you’re not eating rice and beans by the end of the month. When you get paid twice per month you have to be smart about breaking up your bills so that you still have relatively the same amount of spending money throughout the month. What if you get paid odd income? How are you supposed to plan for it when your pay isn’t always consistent? These are questions that so many have and this post will break down the best budgeting strategies for your paycheck.
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I haven’t always known how to answer this question, because we have always lived off a once a month paycheck.
Because this has been the only budgeting system I’ve known, I wasn’t sure how to help other people manage their particular type of income.
BUT I have scoured the internet, read the books and have found what I feel are the best tips for budgeting each different kind of income.
Yes, we have always lived on one paycheck per month, so I’m pretty adapted to it. Honestly, it’s one of the types of pay that cause people the most stress.
Whenever I mention to someone that this is how our paychecks come in, their eyes boggle. They can’t imagine having to have the discipline to make your money last all month long. And they’re right. It does take discipline.
The reason there is such a need for discipline when you only get paid once a month is
A lot of times people get paid, they pay their bills, and then blow the rest of their earnings in a few days. But it’s all good because they get paid again soon. Right? Well, not for the once
Let me clarify, spending your money too quickly will be highly stressful no matter how often you get paid.
When you absolutely have no money to your name it can make anyone feel stressed and broke no matter how far you are from your next payday.
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Basically, you just break your paycheck up into weeks and make sure you’ve paid all of your bills first. Right?
The final question is, how do you prevent yourself from spending it all once you’ve broken it down?
One way to break up your budget is by taking out all of your funds in cash and then breaking them up into cash envelopes.
For example: if you have $600 budgeted for groceries for the month, you can separate this amount into 4 envelopes. Each envelope would then contain $150.
However, if you are the type of person who is going to be too tempted with cash on hand, I suggest trying a savings dribble.
With a savings dribble, the only money you leave in your account is the amount you’ve aloted for the week. The other three weeks of your money go into a savings account and you can set up automatic transfers at the beginning of every week.
If you have $2,000 to spend for the month, you can keep $500 in your account and transfer the other $1,500 into savings. Then set up your savings to automatically transfer $500 at the start of each week.
This is a safe and secure way of keeping your money out of your hands until you are ready for it.
Bi weekly income is probably one of the most common types of incomes for people which is why I definitely wanted to make sure to cover it.
The best budgeting practice for bi-weekly income that I’ve come across is the following method.
If your paycheck happens to be MORE than you planned, you can budget this extra money once it hits your account. –It’s still important to have a plan for it!
After you have calculated the base pay you know you’ll be bringing home the next thing to do is calculate your fixed expenses.
Fixed expenses are things like mortgage or rent, utilities, car payments, and other monthly bills. You know, things that you consistently pay every single month.
Once you know the cost of all of your fixed expenses, divide the total amount by 2. (The number of paychecks you’ll receive).
Doing this simply just breaks down your fixed expenses into an even amount of how much you can plan to spend from each paycheck.
For example: If your fixed expenses total $1,000 every 2 weeks, you can be sure to subtract this amount from your paycheck in order to find your remaining balance.
What you can then do is put this $1,000 into a savings account if you want to make sure you have your expenses covered. This will also make it easier to budget and plan for the remainder of your money.
Another thing that is going to be extra beneficial is trying to get your bills to come out around the same time as your paychecks. So maybe the first of the month, 15th or 30th. Whichever will work best for you and your family.
Inconsistent income can be hard because, well, it’s inconsistent! It’s tough to plan your spending month after month when it’s never going to be the same.
There are two great budgeting methods that work great for inconsistent income. What you’ll have to do is kind of decide which type of budgeting method is going to work best for your type of income.
2 Inconsistent paycheck strategies
While it would definitely take some transitioning and would require quite a bit of discipline,
This would require putting your paychecks into a savings account and then withdrawing them
This would be a bit of a procedure to get used to, but in the long run, it will make planning your budget so much simpler.
This method would work great for our family’s circumstances.
Tom has always brought home a consistent paycheck and my income has been more inconsistent. This way we can plan our fixed expenses off of his paycheck and then decide month to month how my income will be distributed.
To help you stay extra organized, having quality printouts and budget organizational tools can be a lifesaver.
However, planning your budget this way may not be possible and that’s why there is another highly recommended route you can also consider.
If living off last months paycheck is just not something that is going to work for you, there is still hope!
Just like with bi-weekly payments, take the time to calculate how much your fixed expenses will be. Don’t forget your living expenses as well like groceries and gas.
Once you know this total, you can plan your budget around
For freelancers, you know that sometimes there will be months were you bring home significantly more than other months. Right?
Well, that’s why you can plan to live off your fixed expenses. Then, work to build up savings that can help you cover your expenses on those months where you aren’t making as much.
Ultimately, you have to find what works for you when it comes to finding the best budgeting strategies for your paycheck.
Hopefully these gave you some jumping off point ideas that you can use to get started!