If you earn a weekly or biweekly paycheck, it’s easy to feel overwhelmed managing your monthly bills and keeping up with payment due dates, but fear not! We’ve got you covered. This article will explain how to manage your monthly budget when you’re paid weekly or biweekly without neglecting your financial goals.
Do weekly or bi-weekly budgets really work?
Most people who get paid monthly struggle with budgeting. The few who get paid weekly or biweekly also avoid budgeting or trying to save because they believe it will not work for their unique financial situation. The idea that budgeting on weekly pay is not possible is simply incorrect. You can still very much budget successfully if you get paid weekly. Budgeting on a weekly pay period will require a bit more planning, especially when you are trying to save money too. With intentionality and consistency, you will not only enjoy budgeting, but you will be able to achieve your financial goals.
The difference between biweekly, twice-a-month and weekly paychecks
Before we dive in, let’s clarify the difference between biweekly and twice-a-month paychecks. Most people use both terms interchangeably, but there is a difference.
- Biweekly paychecks are paid out every other week or every two weeks. In a year, you’ll get 26 paychecks; some months, there will be an extra paycheck (yay, extra money).
- Twice-a-month paychecks are usually paid in the middle of the month and on the last day of the month. For example, payday in June could be 15th June and 30th June, so you’ll get 24 paychecks in a year.
- On a weekly cycle, you receive frequent payments, usually paid weekly on a Friday. For those paid monthly, it might be the last day of the month or the last Friday of the monthly payroll.
3 Steps to prepare for creating your budget
When you write your own budget, it can be time-consuming at first. I use a budget plan which you can download and create copies for each week.
Below is a step-by-step guide on how to prepare your budget if you are paid on a weekly or bi-weekly basis. The budgeting methods mentioned in this post can apply to both weekly and bi-weekly paychecks.
Step 1. Create a weekly schedule
The first place to start when budgeting a weekly paycheck is to carve out time to work on your budget. It might be worth prepping your budget the same week you are due to be paid. If you know how much you will be getting paid that week then there is no need to wait.
Leaving your budget by chance will not only mean potential missed payments, but it could also prevent your money from working as hard as you need it to, which can lead to financial strain. Having a weekly schedule to work with is what’s different from when you are paid monthly.
Step 2. Understanding your weekly or biweekly pay schedule
You want to be aware of what your pay period is.
Check with your employer whether public holidays impact your pay periods. This way, you can create a month’s worth of budget as you know when to expect weekly payments.
Understanding your payment schedule will make budgeting easier and mean you can spend more time tracking and tweaking your budget during the month. Your employer should be able to provide a paycheck schedule weeks or months in advance, indicating any changes to payroll during holiday seasons.
Step 3. List all your outgoings
The first step is to get cosy, grab a piece of paper and pen and list all your outgoings as a line item.
If you’re new to budgeting, it’s a good idea to review at least three bank statements to get an idea of the true cost of your expenses. You can see where your money is going and know what dates payments are due and the amount.
This is an excellent time to consider if you really need three newspaper subscriptions and keep in mind your financial goals.
Listing other expenses
Grab a paper to record what you are spending each day on your daily budget. It should cover variables including groceries, gas and expenditures.
Categorise your outgoings into the following:
- fixed bills: car payments, rent, utility bills, insurance etc
- debt repayment
- credit card contributions
- savings contributions
- variable expenses: food shopping, petrol, eating out etc
Creating the budget
Now you can see your outgoings; it’s time to get budgeting, at this stage you are halfway there.
Personal finance is personal, and there is no best way to budget, so you can try various budgeting methods and see which works best for you.
We suggest using the zero-based budget for a weekly or bi-weekly budget as this covers the entire month and ensures you allocate your weekly paycheck until you are left with zero.
An alternative budget would be the 50/30/20 rule.
How to do a zero-based budget on a weekly paycheck
- Use a calendar (you can make one or grab a template online).
- Write down your payment date as well as your monthly expenses according to their due date. A great way to do this is to colour code which paycheck will pay which bill.
- Include any irregular monthly expenses on the calendar, such as birthday outings.
- Split your general outgoings across the month. If you spend £200 on your monthly food shop, set aside £30-50 on a weekly paycheck or £80-100 on a biweekly paycheck, so you have enough money throughout the month – the same would apply for monthly spending money.
- If you’re putting your pounds to work, your income minus your expenses should equal £0! This prevents frivolous spending and ensures your money is appropriately allocated.
- It’s easy to lose track of your budget once it’s in place, so review it regularly to ensure you’ve covered all expenses.
11 Quick Tips To Make Weekly Budgeting Easier
It’s not difficult to budget when you are earning every other week. Here you will learn some ways to simplify your weekly budget.
1. Be consistent
Outgoings may seem more regular on a weekly/biweekly paycheck, so keep your budget close by either on your phone or placed somewhere with easy accessibility. Spending money you have not budgeted for can easily derail your financial goals, and it will cost you if you start relying on credit cards and overdrafts.
2. Treat your savings and emergency fund as a bill payment
Choose an appropriate date to pay into your savings account. It’s important that you set aside money for a rainy day and grow your emergency fund to 3–12 months of monthly expenses. It’s great that you earn an income every week, but what happens if you get sick? Will you be paid or need to take unpaid leave?
3. Plan for the fun stuff!
If you spend £20 on Nandos, or go out with your friends once a week, include it in your budget and highlight which pay will cover this expense.
4. Avoiding missed bill payments
Sometimes payment may be due just before your first weekly or bi-weekly paycheck. If you’re concerned about missing a payment before receiving your next paycheck, first see if you can borrow from your emergency fund. Secondly, speak to your service provider about the matter in advance. Some service providers will agree to change your payment date or give you a payment holiday, which is a grace period, so do speak to them if you are concerned about missing a payment. Some mortgage lenders allow weekly or biweekly payments, making it easier for those paid weekly or biweekly.
Alternatively, if, for example, your mortgage payment is due at the end of the month, you can set aside £450 from your first check and cover the balance with the second paycheck, as long as this is accounted for in your budget calendar, you’re all good.
5. Factor in debt payments
When creating your weekly paycheck budget, factor in debt payments, even if it’s just keeping up with minimum payments. Once the debt is cleared, allocate the leftover funds towards savings, investing, family costs, and adding to your fun pot,
6. Couples on different pay schedules require more planning
For couples or households where bills are paid out from a joint account or finances are organised together, there’s a chance that two people can be on different pay schedules. One person may receive weekly pay and the other a monthly fixed paycheck. Whilst this might seem not very easy when it comes to budgeting on a weekly paycheck, it doesn’t have to be if you consider the following important points:
- Schedule a meeting to budget shared financial obligations and think about creating a calendar similar to the one discussed above.
- Take advantage of the different pay cycles. You might find it useful to use the fixed monthly income to pay off larger fixed bills. And use the weekly income for variable expenses or towards joint savings or investment accounts.
7. Use your third paycheck or pay raise wisely?
During the course of the year, on a biweekly pay cycle, you may get a 3rd paycheck in some months. If you have a ‘bonus’ check, overtime or get a pay rise, there are a few things you can do with this extra income:
- You can add this to your savings, such as an emergency fund or a holiday.
- Use it towards home repairs or for annual fixed payments, i.e., insurance.
- You could split the extra check between your fun pot and special events you have coming up.
- Alternatively, you can get a head start on saving towards your bills, make an extra payment, and create a buffer account.
- Add money to your retirement accounts and plan ahead for future expenses.
- Whatever you do, try to be intentional with this extra cash. Even if you decide to splurge, spend it on a big fun goal you have, like a debt-free holiday, replacing a kitchen appliance, or upgrading your wardrobe.
8. Paying tax on bi-weekly paycheck can fluctuate if you work more hours that week
Budgeting with weekly or bi-weekly checks does not make much difference in the overall tax you will pay unless you earn more from week to week. So, on weeks when your salary increases (working overtime), you may find you have a different tax code and pay more taxes.
If you are not sure how you are taxed, be sure to contact your tax office, and HR department to get clarity so you are clear on what deductions will come out when you receive your paycheck. If you are self-employed and pay yourself weekly or bi-weekly, you may want to consider setting 10–20% away from each paycheck to cover tax bills due at the end of the year.
9. Utilise apps and budgeting templates for budgeting on a weekly paychecks
As previously mentioned, there is no one way how to budget weekly paychecks. Try creating your budget by hand, using budgeting apps or budgeting templates to discover which you prefer. In reality, you won’t know which weekly or biweekly budgeting method is best until you actually use it.
- What happens when you have too many monthly bills to pay?
If you find that your weekly bill is more than your weekly salary for that week, you may want to go back to steps one and three and create a weekly schedule and list out your bills. You will need to call your service provider to change your billing dates. Please note that this can increase or decrease your bill for that month. If you are really struggling to keep up with bills, you may need to increase your income or reduce your expenses.
An alternative is to either create a one-month bill buffer to draw from or borrow from your emergency fund.
- What are the employee and employer benefits of weekly pay?
- Weekly paychecks ensure employees are receiving cash as and when they need it based on their working hours. This can relieve the financial strain on employees.
- For an employer, employees starting a new job at the company will not need a prorated salary.
It’s a wrap
Creating a budget when you’re paid weekly or biweekly may seem like a lot, but it’s well worth it. Over time, it becomes much easier, and more importantly, you’re in control of your finances. The main difference between creating a weekly budget and a monthly budget is that you will need to:
- Allocate more time each week for managing your finances;
- Stay organised with bill dates and paying bills;
- Build an emergency fund so in case your paycheck is delayed a week, you can still pay your bills.