Do you get paid every two weeks? Is it challenging that your bills come once a month, but your salary gets pieced out every other week? I've found a method that works well for me and I think it could work for you too!
Start with a buffer in your checking account. Depending on the size of your overall budget, this could range from a few hundred to a few thousand dollars. Doing this will prevent you from overdrawing or worrying about cutting things too close. It's also helpful to start the month off fresh if you haven't been budgeting at all.
Budget just off of those two paychecks per month. The magic of the biweekly pay cycle is that twice a year you get two "bonus" paychecks. They are only a bonus if you aren't depending on them though! Example: If you get paid $2,000 every two weeks, run your monthly budget off of $4,000. Twice a year you'll have an extra $2,000 that you weren't depending on to do something else with.
Consider trimming your expenses. This will give you more to work with. What to trim? Cable, cell phone bills, internet, and insurance premiums are all good to price out from time to time.
Use your extra month's worth of income to:
- Pad your savings. Shoot for a total of three to six months of expenses.
- Pay for home renovations or repairs. This is what we do currently. This year it's for a deck!
- Build a car fund. Challenge yourself to pay cash for your next car. Car payments are so last year!
- Fund your retirement. Make a Roth IRA contribution for some tax advantaged savings.
- Do something fun. Take a trip or splurge on something you've had your eye on for awhile.
While the above isn't all inclusive when it comes to budgeting, it is an alternative method for managing your biweekly cash flow. For us, it's a built in savings plan that helps us to achieve our short term goals. I encourage you to give it a try!
Are you paid biweekly? If so, do you currently do something similar?
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