Making a good budget can be difficult, especially when your bills are only paid once a month and you may receive a paycheck two or more times per month.

I have found that a lot of adults with two monthly paychecks will actually pay their bills with one paycheck while reserving the other one for savings and fun expenses.

That means that they are living off pennies half the month while living like kings the next! That irregularity is not good for the home budget and can lead to negative reactions such as impulse shopping and building debt.

So when I see people dividing their paychecks like this, it hurts down deep in my soul. There is an easier way to manage your money! I promise!

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Let me show you this super simple process, to budget paychecks.

It won’t matter if you get paid weekly, or bi-weekly, because this budgeting process is the same for both.

budget paycheck without calculator

This method is different than others that you may have learned about. There is no percentage math to do; no 50/30/20 budgeting that forces you to break out a calculator.

You don’t need to try and remember the lessons your math teacher skimmed over back in High School. Just a paper and pencil and knowing simple math.

For the purpose of making this example work, I’m going to say that you get paid twice a month. We’ll go with the 1st and the 15th since those are standard paydays and easy to remember. If you actually get paid more than that, and on different days, follow along and simply adjust the math ever so slightly.

After you have figured this process out, you can easily create a home budget using an excel template or google docs if it’s more convenient for you.

So let’s get started, shall we? Grab some paper and some a pencil and follow along. With any luck, this won’t take too long.

How to budget by paycheck

First, where is your money currently going?

It’s incredibly important to understand where your money is coming from and where it is going before trying to tell it to go somewhere else. That’s a similar issue to counting chickens before the egg hatches.

Look at your last 3 bank checking account statements to get a better understanding of your current financial situation.

On a sheet of paper, write down all of your current income sources and the average expenses you see on your last 3 billing statements (assuming you pay for most things with a debit card linked to your bank.) Otherwise, try to remember things as best as you can.

Your monthly income should be pretty easy to figure out. It’s the expenses that can get tricky. You have monthly reoccurring bills such as utilities, electricity, and water. But then you have groceries, clothes, fun money, entertainment, gas, sinking funds, and other bills with irregular totals that can normally make budgeting pretty difficult.

budget by paycheck where is your money going

You could find money missing somewhere.

I personally found out my husband had several paid for monthly subscriptions through his Xbox account when I first started tracking our finances. Yes-I put an end to those and now we don’t have $200 a month flying away for frivolous things.

[Related] Have you found the leaks in your budget yet?

Now on another sheet of paper, drawn two columns.

In your left column, place your average monthly bills found from step 1, and have them listed in order of priority. Placing the most important expenses at the top, such as food, shelter, and water. At the very bottom of the list are the things you can cut or live without if needed.

Now here comes the only budgeting math you’ll need to do:

See the items in your left column and the price totals next to them? Divide those numbers in half. If you get paid 4 times per month, then divide by 4. So basically what we are doing is dividing your monthly expenses by the number of paychecks you receive.

On payday, when that check is deposited into your account, take that portion and set it away in a side account.

set money aside in savings

This makes it easier to budget when you are paycheck to paycheck and in need of something simple and effective.

Since you work with the same in and outnumbers per paycheck and you can track along much easier. Doing this it this way also helps to find irregularities in your budget.

If you have troubles sticking to a budget and need a little more assistance, you can try this trick:

You can choose to have your paycheck divided by payroll or your bank and immediately have that portion set in a savings account, unseen. That means you only have access to the “leftover” money per paycheck and are forced to live more frugally and not overspend.

Then when it comes time to pay your bills, move the money over and write checks, pay online, call or however else you may pay your monthly expenses.

Now you don’t have to worry about living in the dark half the month, or coming up short on rent money. Everything is conveniently tucked away.

forced to live more frugally

Example of a bi-weekly paycheck budget:

  • Monthly Income $3,852
  • Electric $200
  • Water $40
  • Auto Loan $462
  • Car Insurance $180
  • Mortgage $700
  • Internet/Cable $120
  • Cell Phone $160
  • Home Security System $60
  • Total monthly bills $1,922

  • Paycheck budget (half the expenses) $1,926
  • Electric $100
  • Water $20
  • Auto Loan $231
  • Car Insurance $180
  • Mortgage $350
  • Internet/Cable $120
  • Cell Phone $80
  • Home Security System $30
  • Total bills per paycheck $1,111

In this example, the monthly bills are almost an entire paycheck worth! So doing to devote one paycheck to bills and the other to food and fun could quite literally have you living in the dark half the month.

However, having the expenses divided with every incoming paycheck leaves you with over $800 per paycheck to devote to food, gas, savings and everything else.

Seems like a no-brainer way to budget!

Important things to note:

If you have less money coming in, then you have going out, trim everything you can and look for additional ways of income.

Sell things online, offer services or get another job. You can make money with mobile phone apps or by selling craft items. You’d be surprised how many ways you can make an income from home.

Stop eating out, miss a hair appointment, let your nails grow out a little longer before getting that fill. Save money on your grocery bill by making smart purchases.

Don’t expect your first budget to be perfect and set in stone.

It usually takes 1 to 3 months before you start seeing everything come in to play.  During that time, you’ll have ups and downs and feel like you’re on a financial and emotional roller coaster. Stick through it, and you’ll see that it gets easier. Adjust and tweak numbers as needed to get everything settles and calms.

I promise once you have the numbers down, the dust settled, and you have a written game plan, you won’t stress out nearly as much when something pops up unexpectedly.

Having a written budget like this makes following it so much easier, and can set you on the right path to proper paycheck budgeting.

But no matter how you get it done- Get. It. Done.

A written budget is a followed budget.

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budget by paycheck instead of monthly. save yourself so much time and hassle with the easy budgeting method. see how it can change your life!
budget by paycheck instead of monthly. save yourself so much time and hassle with the easy budgeting method. see how it can change your life!
budget by paycheck instead of monthly. save yourself so much time and hassle with the easy budgeting method. see how it can change your life!

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