Does anyone use a budget that breaks things down by paycheck instead of monthly? I feel like monthly budgets don’t work well when you’re paycheck to paycheck.
Paycheck to paycheck all day long…
byu/Used-Dark4396 inpersonalfinance
Posted by Used-Dark4396
5 Comments
If your bills are monthly, this can only sort of work.
But r/ynab may be worth a look.
Virtually all bills and/or regular expenses are incurred on a monthly basis. So a monthly budget view tends to work the best. Of course your mileage may vary.
If that’s an issue for you, then just take a monthly budget and divide by 2. Then you know, per paycheck, what your expenses are even if you don’t yet have that bill in-hand.
Put the money from your paycheck for the things you don’t have active bills for yet aside so that, at the next paycheck when you do have a bill, you then add the other 50% and pay the full bill.
If you get paid every-other week (instead of twice a month), then ~4 months of the year you will get 3 paychecks a month. When that happens, you take that paycheck and put it aside as savings.
I think you might be conflating the word budget with payment/savings schedule. Since you are paycheck to paycheck, you likely need contemporaneous systems: the budget to keep track of expected and actual outgoing and income, and a payment/savings schedule to determine when items get paid, when you move money from account to account, how much to set aside from each paycheck, etc. Think of a budget like a plan. It is only as good as you execute it. Setting out a schedule for how to execute the budget is often overlooked, so you are on the right path to question how a budget would work without a plan.
For example, my system is that all of my recurring expenses (monthly or not) are accounted for together in my budget and I make sure a checking account with that much money is active with all those charges on autopay. I also have part of my paycheck delivered to another bank for savings before it touches my operating account. I have a rewards credit card and charge everything that can be charged onto it, and use the operating account to pay that off in full every month so I get rewards for my normal spending. I have a couple savings account at the same bank as my operating account for things like taxes, car insurance, and other expenses that happen irregularly so that I will have that money ready when I renew.
Might not work for you, but get creative on how to execute the budget you create for yourself.
I have my paycheck divided up so that what goes into my checking covers approximately half my expected monthly bills plus a cushion, and 3-pay months are just bonus padding in case of unusual yet non-emergent expenses.
My current bank r/envelope has “envelopes” that you can fund with your paycheck, so that way you see where your paycheck is going and how much you’d have left. If most of your bills are a fixed amount every month, you can set them all up once and then autofund whenever your paycheck hits. If you used Simple Bank several years ago, it’s almost exactly that again.
Other banks have kind of the same thing but call it different things. I know Ally has “buckets” and a now-dead app called QubeMoney called them Qubes but they’re essentially the same thing.