It's hard to make the most of your money when you're not sure how to budget it.

You may feel like your paycheck is never enough or you don't know where all your money is going.

But using a paycheck budget (or biweekly budget) is a great way to make progress toward your overall financial goals by only focusing on your immediate obligations.

What is paycheck budgeting?

Paycheck budgeting is a system that allows you to make the most of your money by only considering the expenses you need to cover until you get paid again.

Typically, this is in the form of a biweekly budget.

This system is different from a traditional monthly budget because it focuses only on your expenses between paychecks.

Too often, people will spend their entire paycheck too quickly and then have to scramble to make ends meet until their next paycheck.

Or they'll feel disheartened with a monthly budget that includes expenses they can't cover yet, leading them to give up on budgeting altogether.

With a paycheck budget, you can avoid all this by mapping out your spending in relation to your paychecks.

This way, you'll know exactly how much money you need to cover your expenses until your next paycheck arrives.

Why budget biweekly?

Paycheck budgeting is a sort of budgeting hack if you're paid biweekly. There are several reasons why you might want to consider budgeting biweekly.

First, if you find yourself living paycheck to paycheck, focusing on your immediate expenses can help you get a handle on your spending and break the cycle of overspending.

Second, a biweekly budget can help you save for specific goals, like an emergency fund or a down payment on a house.

If you just pay bills that are due before you get paid again you can break up your monthly bills across several paychecks. This lets you increase your cash flow and put more into savings.

Last, if you're already using a monthly budget, adding in a biweekly budget can give you a more short-term view of your spending and help you make informed decisions about where to put your money.

What are the benefits of budgeting by paycheck vs monthly income?

There are several benefits of paycheck budgeting, including:

• Gaining more awareness into your money habits

• Saving money more easily

• Feeling more confident when spending money

• Reducing anxiety around all the bills

• More quickly getting a month ahead of your expenses

Adopting a paycheck budget will help you break the paycheck to paycheck cycle and finally take control of your finances once and for all.

How to get started with a biweekly budget

Now that you know the benefits of paycheck budgeting, here are a few steps to help you get started making your own.

Step 1: Write down your paydays and bills on a monthly budget calendar.

Use a calendar to write down when your bills are due and when you're paid.

Seeing how your bills fall in relation to your paydays will help you plan for the ones you need to deal with now, and not stress about the ones you can deal with after you get paid again.

Step 2: Create your monthly budget categories

Now you know which fixed expenses you're dealing with, but you also need to plan for your everyday expenses like gas and groceries.

Take a minute to brainstorm all the variable expenses you expect to have until your next paycheck and create a budget category for each of them.

Don't forget the irregular fixed and variable expenses too. Things like your auto insurance and Christmas are categories you should consider funding gradually throughout the year.

Step 3: Create a zero-based budget for each paycheck

Zero-based budgeting may sound intimidating, but it really just means you're budgeting every dollar for a specific purpose. In other words, every dollar gets a job.

To create your zero-based paycheck budget, you're going to assign every dollar to a spending category or a savings goal.

Remember, you're prioritizing any bills and expenses that are happening before your next payday.

Any bills coming due after you get paid again can be ignored for now.

By focusing on only your most immediate expenses, you can contribute any leftover money to your savings goals.

Step 4: Track your spending

Just making a budget isn't enough to take control of your money. You also need to follow it. And that means tracking your spending.

There are a few different ways to track your spending, but one of the easiest is to use a budget tracking app.

Mint and YNAB are two popular options that can help you see where you're spending your money and how much you have left.

Ready to create your paycheck budget?

Now that you know all about paycheck budgeting, it's time to put it into practice.

Get out your calendar, note your paydays and bill due dates, brainstorm your budget categories, and start tracking your spending so you can finally take control of your money.

What about extra income... or those awesome 3 paycheck months?

If you find yourself with extra income, it's important not just to spend it all willy-nilly.

Instead, treat it like any other paycheck and budget it out accordingly.

The same goes for those months where you receive a third paycheck.

Biweekly budgeting makes the number of paychecks you get per month irrelevant.

What was once an extra paycheck is now just your next paycheck.

Instead of relying on an extra paycheck twice a year to build your savings, you'll notice you're able to contribute to savings and sinking funds more quickly and easily with paycheck budgeting.

Once you get used to budgeting biweekly, you probably won't even notice when you get a third paycheck.

Track your progress

Part of the appeal of a paycheck budget is the ability to "find" extra money to start funding your savings goals.

But how do you know you're making any progress?

With savings trackers!

Savings and debt trackers are a great resource to help you stay on track with your budget and on target with your goals.

Common mistakes people make when doing a paycheck budget

While paycheck budgeting is a great way to take control of your finances, there are a few mistakes people often make when starting out.

Here are a few of the most common paycheck budgeting mistakes and how to avoid them:

Not knowing your true monthly expenses

The first step to paycheck budgeting (or any kind of budgeting for that matter) is knowing your monthly expenses.

This includes both your fixed costs (like your mortgage payment and your utilities) and your variable costs (like food and entertainment).

If you don't know how much you're spending each month, it will be difficult to create an accurate budget.

Not prioritizing your bills

As mentioned earlier, one of the key components of paycheck budgeting is prioritizing your bills.

This means making sure any bills that are due before your next payday are paid first.

Paying bills out of order can throw off your whole plan.

Not tracking your spending

Tracking your spending is super important to the success of your budget.

Without knowing where you're spending your money, you won't have the awareness to stay on track with your budget or make adjustments as needed.

Traps To Avoid When You're Paid Biweekly

While paycheck budgeting can be a great way to take control of your finances, there are a few traps you'll want to avoid if you're paid biweekly.

One of the biggest pitfalls is thinking that you have more money coming in than you do.

Since you're used to getting paid every other week, it can be easy to overspend in between paychecks and then find yourself short when the next one comes around.

It's important to focus on your biweekly income and not your monthly income if you want to create a realistic budget.

Another trap is not budgeting for irregular expenses.

If you're used to living paycheck to paycheck and spending every dime of it, you may find yourself scrambling to come up with the money for an unexpected car repair or doctor's visit.

To avoid these issues, be sure to build up an emergency fund and plan for irregular expenses in your budget.

Budgeting Biweekly Tips and Hacks

If you're new to paycheck or biweekly budgeting here are some tips and tricks to make the process easier.

Include a buffer in your budget

A buffer is an extra amount of money you include in your budget to account for any overspending.

This way, if you do overspend in one category, you won't have to completely blow your budget.

You'll want to set aside a little extra money out of each biweekly paycheck to cover any overages or unexpected costs.

Use Sinking Funds

Sinking funds are simply savings categories in your budget meant to cover unexpected and irregular expenses.

Contribute to these savings funds each pay period to gradually build them up, so you're not caught off guard when those expenses come due.

Example categories you might want to save for are Christmas and holiday spending, annual or semi-annual insurance bills, and medical co-pays.

Move your due dates

Do you have several bills due around the same time, eating up the bulk of your paycheck? If so, see if you can get your billing date changed.

Most companies don't have a problem with changing your bill's due date as long as your account is in good standing.

Use cash envelopes to stay on track with your spending

If you find yourself overspending in specific categories, try using cash envelopes.

With this method, you'll withdraw the amount of money you've allocated for each category in cash and put it in an envelope labeled with that category.

When the cash is gone, you know you're done spending for that category.

FAQ

What does it mean to get paid biweekly?

Getting biweekly paychecks means that you receive a paycheck every other week. The most common payment cycles are biweekly, monthly, and bi-monthly (twice a month).

Is it better to budget by paycheck or monthly?

There is no "better" way to budget. The best budgeting method is the one that works for you.

Paycheck budgeting can be beneficial regardless of your payment schedule.

If you get paid monthly, budgeting monthly makes sense. If you get paid weekly, a weekly budget may be ideal. Similarly, if you're paid biweekly, you may find it easier to budget according to your biweekly paycheck.

The trick to successful budgeting is to know exactly how much money you have to work with and plan your spending accordingly.

How much money should I save biweekly?

How much you save depends on your individual financial situation.

However, a good rule of thumb is to save at least 10% of your income. If you can save more than that, even better!

How do I budget if I live paycheck to paycheck?

If you live paycheck to paycheck, you may want to consider using cash envelopes or sinking funds to help you stay on track with your spending.

You can also try the 50 30 20 budget rule to help you allocate your money in a way that works for you.

No matter what method you use, the most important thing is to stick to your budget so you can make the most of your money.

How can I save money if I get paid biweekly?

A biweekly budget will help you save more from each paycheck.

By focusing only on your immediate priorities, you free up additional cash each pay period to apply to your savings goals.

How do you budget with an irregular paycheck?

Awareness is key when you're living on an irregular income. You need to know exactly how much your expenses are so you can plan ahead for them.

You'll also need the discipline to not spend money when you see the initial lump sum hit your account.

One strategy is to use a separate bank account for spending vs saving.

To implement this strategy you'll want to deposit your paychecks into a savings account and then move a set amount into a checking account you use for spending.

Instead of being tempted by the full amount of cash in your savings account, you can create more stability by giving yourself a "paycheck" every week or two and transferring money into your spending account.

Final Thoughts

If you're looking for a new budget method to help you take control of your finances, consider a paycheck or biweekly budget.

When you budget biweekly, you can focus on your most immediate expenses and build up your savings.

If you've been struggling to make ends meet or get ahead financially, try a biweekly budget. It might be just the answer you've been looking for.