Comments on: Personal Finance Management on a Biweekly Pay Schedule

By: Aspiring Entrepreneur

Aspiring Entrepreneur — Thu, 30 Oct 2008 07:42:24 +0000

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By: PHP Developer

PHP Developer — Sun, 05 Oct 2008 21:43:09 +0000

All excellent Ideas. Hopefully your car insurance is paid every 6 months and pretty close to that “extra” pay check. I used to be in that routine and it was great.

I’m super frugal so if there is extra money it sits in the checking account or is moved into savings.

By: Gil C.

Gil C. — Sun, 05 Oct 2008 11:41:12 +0000

My wife is in the military so she gets paid on the first and fifteenth of every month. I get paid every two weeks. We budget according to her schedule which means that we get two of my paychecks a year as “freebies”. She gets 24 checks a year and I get 26. Twice a year we get a few thousand dollars to play with.

All our bills get paid on the first or fifteenth.

By: tlange

tlange — Sat, 04 Oct 2008 17:41:02 +0000

I get paid bi-weekly and my wife gets paid 1st and 15th (extremely part time wages). It gets tight for us at the 1st of the month because rent, cable and one credit card are due and that takes most of our checks. We can’t put aside any money into savings from that check. The mid month check we seem to have more breathing room… We also have a decent savings account to fall back on if we run into a problem, but we haven’t had to tap it recently.

Paying off our debts will undoubtedly give us some breathing room all around and we are working to that end, but I think we have somewhat of an income crisis as Dave Ramsey would say. We need to make a bit more money to give us the breathing room that we need.

At least gas is going down some. Who would have ever thought that we would be happy with gas at $3.16 a gallon!?

By: lizriz

lizriz — Fri, 03 Oct 2008 23:34:53 +0000

This article seems to assume a certain income level. Save 10% of every paycheck??? LOL Until recently, that would have meant skipping food. Even now, when I’m just starting to have spending money at all, that seems insanely high.

I’ve frequently used the extra checks for expenses like contacts and car repairs – anything that doesn’t fit into my normal monthly budget.

By: !wanda

!wanda — Fri, 03 Oct 2008 22:04:15 +0000

I get paid monthly and find it extremely convenient. I had a friend, another grad student, who said that in his program, the student were paid once at the beginning of the semester, so they got huge checks three times a year (fall/spring/summer). He said nearly everybody was bad at budgeting under that schedule.

By: Rich

Rich — Fri, 03 Oct 2008 18:29:49 +0000

Trent, my photo is licensed under Creative Commons Attribution-Share Alike 2.0 Generic, which means anyone who uses my photo must attribute it to me. You haven’t attributed my photo to me. Please do so. Thank you.

By: Trish

Trish — Fri, 03 Oct 2008 17:10:51 +0000

I get paid twice a month, so sometimes I have a 5 week month to deal with and no paycheck! That is painful when you are living on the edge. I break the month in two and pay the bills due between 1-16 with the first check and 17-31 with the second. The problem is that you spend more in 5 week months, so I try to break the gas/food/daily expenses into yearly/24 rather than 2x a month, strictly.

By: Sarah

Sarah — Fri, 03 Oct 2008 13:08:49 +0000

Great post! My husband gets paid every month, and I used to get paid once a month, when I worked. We used my big check for all the big payments (mortgage, car loans, insurance, etc.). However, I got paid on the first, and some stuff is due on or around the 1st, so we basically stayed a month ahead on all bills. Then my husband’s checks were for savings, weekly expenses (groceries, gas), and paying extra on debt. The month ahead was like added emergency fund, in that if there was a large expense coming up or if there had been a true emergency, it would have given us a month buffer to figure out a plan or work some overtime or something.

By: Aspiring Entrepreneur

Aspiring Entrepreneur — Fri, 03 Oct 2008 10:16:14 +0000

As for me, I always use the powerful equation of income minus savings equals expense. And then I will invest what I have saved, In this way, I will assure that I will be paid first more than anything else. Hope you can visit my blog too pal as I also share my quest towards financial freedom.

By: David

David — Thu, 02 Oct 2008 21:48:31 +0000

What would you consider a good amount to budget for fun? I budget 10% for an emergency fund and 10% for fun. Obviously this will be different for everyone’s lifestyle. I am just curious what others do.

By: Jeff

Jeff — Thu, 02 Oct 2008 21:25:57 +0000

I get paid every two weeks, but budget a monthly plan, since that is how my bills arrive.

To bridge the gap and make budgeting easier, I opened an “extra paycheck” account at ING direct and whenever I have a month with 3 paychecks in it, I immediately deposit the extra check into the ING account and setup an automated transfer that moves 1/6′th of the money from the extra check back into my checking account each month.

The money then arrives evenly just as if I was paid twice a month.

By: Andrew La Barbera

Andrew La Barbera — Thu, 02 Oct 2008 21:14:56 +0000

Adopt a 4 week (month) schedule. Four weeks to a month,13 months to a year. That’s right, 13 months(4 times 13 is 52). Put what you spend and what you save down on paper. This way you’ll know what money is coming in and where the money is going out. What you don’t know you can’t control.

By: kz

kz — Thu, 02 Oct 2008 20:33:07 +0000

In Trent’s post and in a couple commenters (or at least one) I noticed that they said to put 10% of your income into emergency fund every paycheck. Isn’t that just until you build it up to the amount you want? We have 4-6 months (depending on how desperate the situation would be) of expenses in our emergency fund, so divert our monthly savings to other goals. Are some people really continually stocking the emergency fund (and not just after using some for something)?

By: Sara

Sara — Thu, 02 Oct 2008 20:16:51 +0000

I had a really good system going when I was with my sons father, which is also good for when you are splitting bills with someone.
We had a joint checking account with free online bill pay that we used just for our bills. We determined on average how much our monthly bills were. Then we determined what percentage we would each be responsible for. Since I was staying home with our son, and going to school full time while only working part time – we decided to equally share the “extra” money, instead of equally splitting the bills. We then determined how much needed to come out of each paycheck to be able to pay the bills monthly plus an extra 10% for padding (not considering the extra paychecks that come up when your paid bi-weekly), and had that amount automatically transfer into the bill pay account on pay days. Then we figured out the average amount that each bill was monthly, and set up automatic bill pay through the joint checking account. Some months it ws a little more, some months a little less – and we would review the bills when they came in to see where we stood. That way if the electric bill was a bit higher than usual and we owed some money on it, we only had to come up with $20 or so instead of $120. And the extra money that went in from those “bonus” checks helped add some extra padding. This way we didn’t have to worry about missing a payment – and as a matter of fact, we hardly had to think about our bills at all. Our paychecks were direct deposited, and the proper amount automatically went out to pay the bills, and the account built up savings all the while. I even had a few bills get so advnaced that my bills said that they owed ME money. I like getting bills like that in the mail :)

By: Jen

Jen — Thu, 02 Oct 2008 19:56:43 +0000

I get paid bi-weekly and I have my budgeting system set up so that half of everything gets paid every two weeks. In other words, when I get my paycheque tomorrow, I will put away half for my rent and student loan payments for the month of November. Then I will go through online banking and pay roughly half of my power bill, cable bill and cellphone bill, all of which tend to be about the same amount every month. When my next pay comes in two weeks, I’ll pay off the remaining amounts on the utilities and make up the rest of my rent and loan payments. I’ve been working on this system for about four years now and so far I haven’t missed any bills or had too many cash flow issues.

By: Cecil Meeks

Cecil Meeks — Thu, 02 Oct 2008 19:45:51 +0000

Dave Ramsey’s plan works.

Use it people. Cut up your credit cards and cancel. Stick to envelopes and BUDGET on paper BEFORE the month begins. This works all the time.

We found money we didn’t know we had. Now, we are closer and closer to being debt free! All of those car/loan payments are going to MAKE us money instead of LOOSE money.

:-)

By: JM

JM — Thu, 02 Oct 2008 19:13:05 +0000

For me, I try to move as much of my automatic billing into biweekly periods to coincide with our paychecks … RRSPs, mortgage, savings, property taxes, and any other fixed expenses.

For variable expenses, my credit card bills line up on the 4th and 19th so I what I find helpful for budgeting is that by the 1st of each month I pay off all the transactions and amount owing immediately on the credit cards. This way I know that I’m clear and debt-free for the next month.

The great thing about biweekly pays is that it forces you to live slightly more frugal to fit within the two pays per month. The extra savings can be used for savings, investment, and to help soften the brunt of any unexpected budget items.

By: Jen

Jen — Thu, 02 Oct 2008 19:08:53 +0000

This may work for some, but I have my own system. I get three checks each month. My monthly check and my husband’s two biweekly checks. I have a list of bills that is paid with each check. Any overage goes to our snowball fund. However we do have ONE bill that is paid every two weeks and that is my husband’s lunch and gas fund. So, I still have to take that money out even though we get the “extra” check. Nothing goes unpaid in our house. But, we will be putting the majority of October’s “extra” check toward our debt. I will also make a payment to our annual lump sum fund because it is a little behind this year. (that is the fund we pay our home taxes, car plates, and flood insurance out of as those are annual bills.)

By: Emily

Emily — Thu, 02 Oct 2008 17:42:54 +0000

I do sort of this same reasoning. I figure out how much I need for my husband and I’s allowance, daycare, gas and food for the week. Then when we get paid (between the two of us it’s every week) I take that money out in cash, and divy it out accordingly…and we don’t use our credit or debit cards. All our bills come out automatically, so the rest of the money just sits in our account ready to pay bills. That extra paycheck, will join it – giving us a nice cushion.