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You are probably here because you just landed a new job and found out that you will get paid bi-weekly or you have been paid biweekly but do not know how to budget it or probably you are here because you are on a quest for a better budgeting system. Whatever your reason is, don’t worry you are in the right place.

My husband and I are paid biweekly and I have been budgeting on a monthly basis and it works well for us. However, everyone is different, what might work for us might not for you.

So without further ado, let’s dive in.

Just to be clear, getting paid biweekly does not mean you get paid twice a week. No. It means that you will receive your payment on a set day every other week.

Technically, you will be paid twice a month resulting in 24 paychecks. However, some months you will get three paychecks for a total of 26 paychecks. Occasionally, depending on the year, you will get 27 paychecks.

If you are mindful of your budgeting and stick to twice a month budget, you will be able to use the “extra” paychecks for debt payment, beefing up your emergency fund or funding your savings.

So here are some ways on how to budget biweekly paychecks.

How To Budget Biweekly Paychecks

Before you start figuring out which method of budgeting biweekly paychecks is best for your financial situation, you will first make your monthly budget.

Grab a pen and paper and block out an hour or two of your day to create your budget. Let’s start budgeting.

First, you start by figuring out your monthly expenses. To better facilitate this process, gather all your bank statements from the last month and list down all your expenses. Here is a checklist of budget categories for reference.

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Mortgage. Car payments. Groceries. Cable. Phone. Internet. Gas Money. Student Loan.

Everything and anything that you have to spend money on, write it down. Check out Beginner’s Guide To Monthly Budget to have a better understanding of how to set up your budget.

Now that you have your monthly budget, you can now start to figure out which biweekly budgeting is best for you. Here is how your monthly budget can look like.

#1 Take Monthly Expenses and Divide It By Two

The first method on how to budget a biweekly paycheck is to divide your monthly expenses into half. For example, if your mortgage is $1200, you divide that into two, and you will have $600.

If your total monthly expenses is $4000, divide that into two and you will have $2000.

Your first paycheck will pay the first half of your monthly expenses and the second paycheck will take care of the second.

So your spreadsheet will look like this.

This method may be perfect for some but there are some bills that cannot be paid twice monthly. Also, some mortgage companies do not honor two payments in a month. You might even get penalized for not paying the full amount.

A work around this can be setting aside the half-payment on a separate account and then when the bill is due, you can transfer that back to the checking and pay the bill. It adds more work to your budgeting tasks but it has its advantages.

When you separate the half-payment, you will eliminate the temptation to spend it on other stuff.

#2 Each Paycheck Pays For Fixed Expenses or Variable Expenses

Another method on how to budget biweekly paychecks is to give each paycheck a job. Either to pay the fixed expenses or variable expenses. In addition to the two types of expenses, some add a third one which is the savings.

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If I am using this method, I would add savings to the fixed expenses because I like to treat it as a fixed expense that I need to pay every month.

Fixed expenses are the bills that you pay every month that does not change. It can be your mortgage, rent, car payment, HOA, utilities, savings, etc.

Variable expenses are the ones that changes every month and you have the ability to spend less or more on it. It can be dining out, groceries, gas, entertainment, etc.

Now look at your expenses and categorize them into fixed and variable. Your spreadsheet can look like this.

The downside of this method is not all of us have lesser fixed expenses. Most of us might even have higher fixed expenses than our first paycheck, which can cause a huge problem.

A work around this can be to use the first paycheck to pay just the first and/or second biggest fixed expense. It can be your mortgage and car payment.

This adjustment will give you a wiggle room for other expenses.

#3 Budget By Due Dates

The third method, which I think is the most reasonable out of the three is utilizing the due dates of your bills.

Go back to your fixed expenses and pay attention to the due dates of your bills. If for example, your paychecks come on the 5th and on the 19th of the month, group all expenses by due dates.

Your first paycheck will pay all the bills that are due before the 5th of the month and the second paycheck will take care of the bills that are due before the 19th of the month.

Your spreadsheet can look like this.

In this method, the variable expenses are divided into two. For example, if your budget for grocery is $400, you divide that into two to come up with $200.

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I personally use this method and in here I categorize savings as a different category from fixed expenses. But I still divide them into two and put it away in a savings account.

For example, if I am budgeting $50/month to save for a vacation, I will take the half-payment every paycheck and put it in our savings account.

The same thing for annual fees like a gym membership, car insurance, home insurance, etc. I will divide the total annual fees into 24 and that will be the amount I will set aside from each paycheck.

So if your home insurance is $1200, divide that by 24. The result will be $50 so every paycheck, you set aside $50 dollars. By the time the home insurance is due, you already have the full amount to pay it off.

This process is called funding your sinking funds. A sinking fund is a way of saving a little money each month to save for a big purchase later on.

The Last Thing You Need To Know

If you are just starting out on your budgeting, do not be discouraged if you mess up the first time, second time, third or fourth. Budgeting takes practice, the more you do it, the better you’ll get.

It is important to note that in every budgeting, it is a good practice to always have a buffer. If you have a buffer, you will less likely be hit with fees.

Before you start budgeting, I recommend saving up for a month’s worth of expenses so that you’ll be covered. I usually have last month’s salary pay for this month’s expenses.

There you have it!

Those are the ways on how to budget biweekly paychecks. There are a lot of creative ways on how t budget but the most vital thing for it to work is to stick with one that works with you and your family dynamics.

Are you budgeting biweekly paychecks?

Clever Ways On How To Budget Biweekly Paychecks

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