Changing from monthly paycheck to bi-weekly?

[Farro]

Hi all!

I haven't had a bi-weekly paycheck in years, so this is quite an adjustment. I finally worked out the budget of not having a lump sum all at once.

So I budgeted on my take home pay for 24 checks a year (2 x 12 months). So I'm sitting here wondering why my salary isn't adding up to what I'm supposed to make and duh, two months are actually 3 paychecks!

Instead of redoing the entire budget, I'm just going to put those two extra paychecks in savings or something.

How do you guys handle your budget - do you budget for 2 checks every month? Or do you somehow figure in the month with 3 checks into your budget, and if you do that, how?

thanks!

 

[tvguy]

Never had a budget. Basically, if I don't have the money, I don't buy it. I just pay the monthly bills when they come in as long as there is money in the checking account. I have never been paid once a month, mostly every 2 weeks, and for a few years twice a month.

 

[Farro]

You dont have a budget? Certain bills due each month at certain times, groceries, etc.?

Good for you, but I definitely follow a budget each month!

 

[wdw_dine_junkie]

A few years ago we switched from bi-monthly checks to bi-weekly. I just treat the three paycheck months as mini bonuses and only pay the bills based on two checks a month. I try and set money aside for vacations or Christmas, if some other expense didn't pop up. November will be a 3 check month this year, which will be helpful for the holidays.

 

[tvguy]

You dont have a budget? Certain bills due each month at certain times, groceries, etc.?

Good for you, but I definitely follow a budget each month!

Not sure how you are defining budget. To me a budget is an organized plan for a month showing $xxx for food each month, $xxx for electricity, etc that you stick to. I don't have that. A bill comes in, I pay it. But we are at a time of our lives that other than a car payment, we have no debt. Our recurring monthly expenses are about $1,600 a month including the car payment. As for extras, if we don't have the cash on hand, we don't buy it. But there is no question I am cheap. The car I traded in last year on the new one I had for 31 years, and it was paid off for 28 of those years.

 

[QueenIsabella]

I don't have an actual budget, either. I just pay bills as they come due. Going to every 2 weeks is a nice way to "force" yourself to save.

At DH's last job, he got paid semi-monthly, but the amount was always the same each paycheck. He starts a new job next week, I have no idea how he'll get paid. I guess we'll find out!

 

[clutter]

All of my paychecks go into savings. Every month, I transfer my monthly budgeted amount to my checking account.

 

[Searc]

We don't have a budget, either. We pay bills as they come in. Those two extra paychecks a year are added to our savings. This year, they are going towards our Hawaii fund.

We have a good idea of what our monthly expenses are, so at this point in our lives, don't need a budget anymore.

 

[maria's_mommy]

I listed all my monthly bills then divided them as equal as possible into two groups for the two paychecks. I have the 2 bonus checks planned for July ( both kids birthdays) and December to help with those expenses.

 

[barkley]

Hi all!

I haven't had a bi-weekly paycheck in years, so this is quite an adjustment. I finally worked out the budget of not having a lump sum all at once.

So I budgeted on my take home pay for 24 checks a year (2 x 12 months). So I'm sitting here wondering why my salary isn't adding up to what I'm supposed to make and duh, two months are actually 3 paychecks!

Instead of redoing the entire budget, I'm just going to put those two extra paychecks in savings or something.

How do you guys handle your budget - do you budget for 2 checks every month? Or do you somehow figure in the month with 3 checks into your budget, and if you do that, how?

thanks!

timely question b/c march will be my dd's first 3 paycheck month (i helped her set up her first post college graduation budget)-

we did as you did-budgeted based on 24 checks per year/2x per month. for now she will be using the 3rd checks to make lump sum payments on the principle of her student loans-it will work out to each check being the equivalent of about 7 months of her normal payments but b/c of the interest savings will knock more time off the life of the loans (we used a similar method to payoff our mortgage over a decade early).

All of my paychecks go into savings. Every month, I transfer my monthly budgeted amount to my checking account.

that's kind of what we had to do when dd was in college-she would get monthly pay from her job(s) on campus but the bulk of her income was from scholarships and student loans which only disbursed 3x per year-and on a wonky schedule of september/january/april. everything direct deposited into one account that then auto transferred into her 'working account' (checking) based on a monthly budget (helped tremendously her last year in college b/c it meant she was covered for 4 months of expenses upon graduation so when her new job started but she got hired right after a pay day so she didn't get her first full paycheck for 4 weeks it was a godsend).


p.s. we live debt free but still use a budget-it worked to get us to being debt free so we see no need to change.

 

[Iowajes]

I also don't have a budget. We know how much money we make in a year. We don't spend more than that.
A lot of the money from our checks are diverted into automatic savings- 401k, 403b, HSA, FSA, dFSA, IRA, and taxable investment accounts. Saving first has been a huge thing- we save, and then we spend.
All other money is put into a checking account. All my bills are autopaid from the checking account. When the checking account balance gets too high, I transfer money to the savings account. When the savings account gets too high (basically- beyond where they pay a reasonable interest rate) I put money into CDs with higher rates. I know too many people who use budgets as spending plans. Our goal is not to have all the money spent.


We have #2 going into daycare soon, so probably the taxable investment account deposit will get diverted to daycare, but we are going to try to do some discretionary spending cuts first to see if we can maintain that while still paying $3,000 a month in daycare.

Personally, this works very well for us. It doesn't matter when the money hits my account. So biweekly, bimonthly, monthly paychecks have never made a difference. As long as the money is going into the account.
Living well below our means has meant we are able to splurge when needed, and also adjust when we've had job loss. We have very little discretionary spending though- my husband and I are not really consumers. Though our grocery bill is quite high, because he refuses to plan around sales

I have never carried any debt other than a mortgage. We have enough money to pay it, but we have intentionally chosen to invest rather than pay it off. (My husband did have student loan debt, but we paid that off within 3 months of marriage. My BS was scholarships, my first master's we paid cash, and my 2nd master's I'd doing slowly so it is all employee reimbursed.)

 

[iivye]

I get paid weekly but only pay bills on the 1st and 15th so my budget is on a two week cycle and includes two paychecks. The months that I get 5 checks instead of 4, the extra check is like a bonus for me and saved for trips.

 

[barkley]

We have #2 going into daycare soon, so probably the taxable investment account deposit will get diverted to daycare, but we are going to try to do some discretionary spending cuts first to see if we can maintain that while still paying $3,000 a month in daycare.

god-i remember those days, then it became private school tuition which honestly didn't seem as bad in comparison. i will say though-i managed to get a decent break on daycare when i hit up their business office to consider offering a discount for less frequent than monthly payments. they were affiliated with a k-12 private school that offered tiered increasing discounts based on parents paying quarterly, bi-annually or in one big chunk so i figured it couldn't hurt to ask. managed to get 10% knocked off which given we were paying around $2000 per month back in the mid late 90's was a significant chunk of change (still is for that matter).

 

[Distinkt]

I believe that you will like having the bi-weekly much more than the monthly paycheck. I just looked at my bills and due dates and set up a schedule where I pay about the same amount out of each paycheck, though that can be a little difficult if you are bi-weekly and not twice a month since you do not have the same fixed pay dates each month. I had a little notebook that I would create a few months payment schedule in and then I could refer to that. The two extra paychecks we used for vacations or other non-essential expenses. I also made sure to include in the schedule an amount for food, supplies, gas, and living expenses, and the remainder was transferred to savings. I pretty much know about how much we need for living expenses beyond bills for two weeks.

One good thing, you only have 14 days between paychecks so it is easy to figure out living expenses. Fixed paychecks for twice monthly pay dates can include more weekends (which I found we spent more money) and was just a bit more difficult to calculate. We had monthly paychecks when we were younger and it seemed then that we were living on a shoestring by the end of the month, but we had less money and a houseful of children then too! Lol.

 

[dclpluto]

Are you in the USA? If so I thought it was law that your employer had to pay you at least twice a month.

Update never mind I google it it depends what state your in

 

[GreatLakes]

Both my wife and I get our 3rd paycheck in the same month and we treat it like a bonus. We throw at least half in a high interest MM, some extra on the mortgage, some into our son's 529 plan, and the rest into savings for anything that comes up outside of the norm or for home improvements.

 

[angierae]

For me, a budget is more about knowing where my money is going. I want to know if I'm suddenly spending a bunch more on groceries, or if my trips to the coffee shop are getting out of hand, or if our electric bill suddenly gets higher. I've been using You Need a Budget for about a year now and I love knowing that I am spending money where my priorities are, instead of going "Well, I have $200 extra this week" and then having it all just trickle away.

 

[angierae]

For me, a budget is more about knowing where my money is going. I want to know if I'm suddenly spending a bunch more on groceries, or if my trips to the coffee shop are getting out of hand, or if our electric bill suddenly gets higher. I've been using You Need a Budget for about a year now and I love knowing that I am spending money where my priorities are, instead of going "Well, I have $200 extra this week" and then having it all just trickle away.

 

[Adventurelawyer]

When I had a three paycheck month, I paid everything on the usual schedule and banked the “extra” check for rainy day stuff, etc. if you treat it like its extra, its gone and spent before it clears your account. If you treat it as though it never existed, you will have it when u need it.

I have also been known to adjust my withholding on those months so I get the maximum in my pay check. Uncle Sam does not need an interest free loan from me.

 

[OrangeBirdGirl]

DH & I always were paid every 2 weeks (each are on separate weeks). So the months where we get 3 checks it is just extra savings, well besides the weekly money for gas, spending, groceries, vacay savings, etc.

The problem that you might run into though is you have budgeted with the annual salary being 12 checks for probably years so the 10 months you aren't getting the 3rd check, depending on if you do a zero budget you might look like you are short. If that is the case, I'd take the odd checks and use that for your savings and save less on the other checks if that is an option. It'll all equal out at year end.