Biweekly Budgeting: How To Plan When Paid Biweekly

Biweekly Budgeting: How To Plan When Paid Biweekly

McKinzie Bean
McKinzie Bean
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Are you looking for ways on how to make your biweekly budget work?

If you’re like most people, payday comes every two weeks. Unfortunately, not all of us have the luxury of having the cash to spare by the end of that period.

With day-to-day expenses and bills to pay, a lot of us need help on how to budget with biweekly paychecks. It can be a struggle to come up with an allocation to last two weeks.

If you’re looking for a biweekly budget plan, we’re here to help.

Biweekly Budget Planning

In this article, we offer practical tips on how to make a biweekly paycheck budget work. We’ll focus on settling your payables and overdue payments while still coming up with a solid plan to save money for the rainy days.

So let’s get started.

Here are our suggestions on creating a monthly budget based on biweekly pay.

List down your bills and expenses.

What’s the first thing you should focus on?

Determine your household budget percentages and assign their corresponding amounts every month.

Get your bills and payables in order.

Write down all the payments due for the month, arranging them from the earliest due date to the last. Make sure to also write down the due date beside each item in your list.

Once you got them all listed, here’s what you do next.

Let’s say you got your pay on the 30th of the previous month. So all the bills that will be due between the first and 14th of the month should be covered by that paycheck.

On the other hand, bills and other payables due from the 15th to the end of the month will be covered by the second paycheck.

By making this distinction, you get a good idea of what you need to spend on for the month.

This is one of the benefits of writing things down. You get a better picture of what you need to focus on for the month. It creates a bigger impact compared to just having reminders set for all the due dates.

Now that you got your payables sorted out, here’s the next thing you should do.

Related: How To Make A Budget + Free Printable

Create a list of all the necessary expenses.

What are the necessary expenses for this month?

Let’s start with the groceries, followed by rent or house payments then utilities. Don’t forget to include allowances for your transportation and perhaps certain conveniences and luxuries as well.

Got kids?

Set aside a certain amount each paycheck for their college fund.

In your biweekly budget, don’t forget to make allocations for the following, among others:

  • Car insurance
  • Life or health insurance
  • Student loan payments
  • Cable and internet
  • Entertainment
  • Retirement savings

Perhaps you and your family would like to travel. You might want to set aside savings for holidays and vacation trips.

It’s good to set aside an emergency fund to answer for unscheduled home or car repairs or medical check-ups or treatment.

Determine which payments to prioritize.

In determining the order of allocating money for bills and payables, always look into the amounts that are due and demandable, if not overdue.

If you can settle your bills earlier, the better. That way, you can avoid paying penalties for late payments.

Follow these tips if you get behind on bills

This is true with credit card payments, car payments, mortgage payments, etc. If you miss making these payments even by just a day, you could incur interest. Or worse, it can have a negative effect on your standing as a creditor.

Avoid paying extra on the interest payments by settling your amounts due as soon as you’re able to. The earlier you pay, the better off you will be. Not only will you settle your loan quicker, you will also reduce the interest due from the principal amount.

Here’s another benefit to settling your dues as soon as possible. By unloading your cash on your payables, you also avoid the temptation of spending your available money on other things. For one, you can temper the urge for impulse buying.

Double-check on your list of bills.

Look through your bank statements to see if you have missed anything out.

Moving forward, it’s best to also take note of your expenses and payables for the current month; you can use it for future reference.

Evaluate your spending.

If the total amount of your expenses is lesser than your income, then you are living within your means. This is good since you have no trouble taking care of your bills.

On the other hand, if there is barely anything left from your paycheck after subtracting the expenditures, then this is a cause for concern. Worse, if you are left with a negative balance.

In the latter case, you will need to take a closer look at the areas you need to improve on.

Related: 21 Genius Money Saving Life Hacks To Save Thousands

Perhaps you need to scale down with your groceries, limiting it only to the essentials. Or you could place a cap on your entertainment or amusement spending.

If, after much consideration with your spending, you are still living paycheck to paycheck, then you might want to consider having another source of income.

There are a lot of side hustles that you can engage in. From driving for Lyft to doing online work as a VA or social media manager, there are plenty of ways to earn on the side.

Spend your extra paycheck wisely.

Getting a bonus can be a glorious thing. But before you act upon the urge to go shopping, stop and take a step back. Instead, think of ways to spend that extra paycheck wisely.

You could set aside that money to settle the bills that will be due soon. Or you can stash it in your kids’ college fund or put it in your vacation fund.

The extra cash can also be used as a buffer for any unscheduled expenditures like home or car repairs. Otherwise, just keep it in your savings account.

It’s not a good idea to expect the extra cash to come in because that may only result in disappointment when it doesn’t happen. That being said, you might want to track down the days of the year when that magical paycheck will arrive.

Here are a couple of items worth reiterating.

We mentioned about setting up a fund to buffer for unexpected or unscheduled expenditures. In the same way, we also touched briefly on making timely payments (if possible, ahead of the due date) on mortgage dues.

These are just some of the items worth reiterating. So let’s hammer away on these points.

Setting up a buffer.

It’s not always that we have extra cash to spare. As a result, we tend to lose a grip on our budget due to unscheduled payments or unexpected expenses.

These unanticipated expenditures can set us back; the effects can even loom for a couple of months before we can fully recover.

For example, emergency medical treatment can be very expensive especially if you don’t have insurance coverage. Most people would be forced to borrow money, which results in having to deal with loan interests as well.

By setting up a buffer, you can minimize the ill effects of an unscheduled expenditure. By putting aside a certain amount, you have the necessary funds to cover any future expense before you even receive the next paycheck.

Ideally, you should have savings equivalent to at least three to six months worth of salary.

Related: Emergency Fund: What It Is & Why You Need One

Admittedly, setting up buffer savings may entail a lot of discipline. But it’s just a matter of restraining yourself.

Before you decide on spending your extra cash unnecessarily, you might want to think about the future. You’ll thank yourself later when the need for that money arises.

Setting money aside for the mortgage payments.

Do you have mortgage payments to make?

That can take up a lot of your monthly budget. If you’re paid biweekly, these payments can consume takes a big portion off your paycheck.

Want to know how you can lessen this impact?

You can opt to pay your mortgage dues on a biweekly basis as well; that is, if that is a possible option. If you do this, you can pay off the mortgage faster. Also, you will be paying less interest in the long run.

If this option is not available, you could simulate payment by making sure you deposit a certain amount in your savings account. When it’s time to make the mortgage payments, just take out the amount you need.

By stashing your money upon receipt of your paycheck, you can reduce the likelihood of spending it on other things. Then when the due date arrives, you have money to show up for, allowing you to pay the required amount.

Related: Living Mortgage Free: How to Get Started

Creating a biweekly budget for miscellaneous expenses.

As they say, you’ve got to live a little and love yourself a little. Indulge and enjoy your money once in a while. You worked hard for it.

Unwind and get a massage. Or treat your loved ones to a nice dinner or a movie. Perhaps a trip out of town. Take a breather from your hectic schedule. You deserve time-off.

So it’s important to set aside a budget for these things. Let’s call it miscellaneous expenses because they don’t form part of the usual monthly expenditures.

It’s good to go out and enjoy once in a while. Thus, it’s only logical to set up an allowance at a reasonable amount for these things.

When you have already consumed this set amount, that’s it. No more digging into your allocations or savings. That’s the limit.

Conclusion: Bi-weekly Budget Plan

Creating your biweekly budget can take time and practice. Experiment with what works for you. If plan A doesn’t work, there’s plan B. If that doesn’t work, you have the rest of the alphabet.

It can take a while for you to master. With these tips, we hope you can create a biweekly budget system that’s beneficial and suitable for you.

McKinzie Bean
McKinzie is a mom of two, and a personal finance enthusiast. She loves teaching other moms how to save money, make money, and take control of their financial situation. She has started five profitable businesses and in college, she double-majored in Financial Planning and Psychology. You may have seen her in publications like Forbes, The US Chamber of Commerce, Yahoo Finance, Money.com, The Penny Hoarder, & more.

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