Four million. That’s the estimated number of people in the U.S. who left their jobs this year in April alone according to the Labor Department. Dubbed “The Great Resignation,” Forbes attributes it to the tumultuous year 2020 was. Between lockdowns and the uncertainty of our health and financial well-being, many people were doing a lot of reflecting. When things started to return to some sort of normalcy, they decided they weren’t going to pick up where they were before.
With a new job comes a new pay cycle. According to Bureau of Labor Statistics data as of February 2020, 43% of U.S. private businesses paid employees every two weeks. Weekly was the second most common pay period, weighing in at 33.3%. Less common were bi-monthly (twice-a-month) and monthly, at 19% and 4.7%, respectively.
No matter how often you get paid, there are simple ways to better track where your money’s going. Whether your situation involves a new job, a less-than-predictable stream of income or you’re managing to save pockets full of money, budgeting helps. Can it be a pain? You bet — but so can a lot of the necessary things in life, like brushing your teeth (but you still do that … right?!). Budgeting can be a useful tool to keep you on the path toward your financial goals.
Bi-weekly and/or bi-monthly paychecks
Most Americans get paid every two weeks (with 19% getting bi-monthly, or twice-a-month, paydays). For those couples who get paid at the same time or only have one income, budgeting can take a little more discipline. For those couples who get paid bi-weekly but on the opposite week as their partner, they have a bit of a financial buffer.
First things first, write down all your bills, due dates and whether they’re recurring. Then transfer these due dates, along with your paydays, to a calendar. If you’re super savvy, you could color code the bills to coordinate which paycheck will cover them.
A bi-weekly pay period also gives you an every-other-week opportunity to save. Plus, you’ll get a few months with three paychecks instead of two, allowing a bit of wiggle room to start that emergency savings, put a little extra toward retirement or pay down debt.
PRO TIP: BUDGETING TOOLS: Budgeting can be a little daunting if you’re just getting started. Our online calculators can help. Free budgeting apps like Mint are also a convenient way to help you monitor your daily activity right at your fingertips.
Weekly paychecks
Getting a steady paycheck every week can make it easier to shuffle funds around as needed, particularly if unexpected expenses pop up. But it can also make it easier to overspend when you know your money won’t run out for long. Your best bet for budgeting: setting up automatic payments or transfers when possible.
Personally, I try to make my loan payments weekly. If I’m unable, I deposit funds into a secondary account and transfer the payment monthly. I also put money into my IRA on a weekly basis, as well as pay my kids’ allowance (their age plus two each week, which we discussed in 529 Plans and Beyond in our summer issue).
If you find too many bills due during the same week, call to find out if you can change your due dates to make them more manageable (this is true no matter what pay period you happen to be on). You can also set a weekly grocery run on the same day each week and only spend your budgeted amount.
PRO TIP: PLAN AHEAD: No matter how you budget, it’s helpful to plan ahead for special events, birthdays or vacations that could impact your budget. With the holidays right around the corner, try to save an extra $10 each paycheck (which might mean sacrificing a few trips to Starbucks or lunches out). Depending on when you start, you could save almost an extra $100 for gifts or party planning!
The same concept can be applied throughout the year by putting away an additional $5-$10 per week into an emergency fund like Balance Builder.
Monthly paychecks
With a once-a-month paycheck, it’s helpful to have a plan in place to make sure your money lasts. Too many days left and no more money is never a good situation. Automate your regular bills so they’re taken out as soon as you get paid — that way, those important “fixed expenses” don’t fall through the cracks as the month wears on. Some examples of fixed monthly expenses include: rent/mortgage, internet, cell phone, child care, insurance and subscription services.
But what about irregular bills, like utilities, where the amount can change? This is where tracking your spending comes in handy — after a few months of statements you can determine your average spend. For example, let’s say you spend $900 each year on your water bill. Divided by 12, that puts you at $75 per month. Set that amount aside (or a few dollars more) so it’s ready when that bill comes due.
PRO TIP: MOBILE BANKING: With mobile banking, you can stay connected to your finances whenever, wherever. Check balances, pay bills and more — including setting low balance alerts. This feature can help you stay overdraft free as you master your monthly budget.
Even the best budget won’t fix a shortage of income, and money only stretches so far despite how easy some extreme couponers make it look. If you’ve determined your paycheck just can’t cover your basic living expenses and bills, look for a second job, side hustle or ask for help. 211.org is a comprehensive network designed to help direct people with housing, food, transportation and other financial needs to local resources.
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