# How to Budget When Being Paid Every Two Weeks

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Coming up with a budget when you are paid every two weeks poses unique challenges. Your pay will not always line up with when your bills are due; if you're paid every second Friday, for example, your influx of cash won't consistently come on the first of the month when you have to pay rent. You will also have to be prepared for some months when you receive three paychecks instead of two, perhaps falling on the first, 15th, and 29th, for example. With diligence and a regular bill-paying habit, however, you can ensure your pay covers your expenses.

Calculate an annual total for all of your fixed expenses. For example, if you pay \$80 a month for cable, multiply \$80 by 12 months to arrive at an annual total of \$960.

Calculate an annual total for all of your variable expenses. Use as accurate an estimate as possible for each variable expense and consult past receipts if necessary. For example, if you spent \$165, \$140 and \$170 in the past three months on grocery shopping, you would be reasonable to assume a monthly cost of \$165 for groceries. Your annual total would be \$1,980. Include discretionary expenditures such as social functions and entertainment as an annual variable expense.

Calculate how much you want to add to your savings in one year. For example, you may want to save up \$10,000 over the course of 5 years, which amounts to \$2,000 in one year. Similarly calculate money you want to put into a retirement plan or investments.

Calculate the amount of money you normally spend annually in situations that are unexpected but must be resolved. This is the minimum amount you will want to have available in an emergency fund. For example, add together the cost of emergency car repairs and travel to see a sick relative. If you do not have any specific emergency costs that you can recall, set aside a reasonable amount, such as \$100 per month or \$1,200 a year, to devote to an emergency fund.

Divide the annual amounts calculated in Steps 1 through 4 by 26. Since a bi-weekly pay schedule results in 26 paychecks in a year, dividing the annual amount of each expense into equal allotments from each check will cover all the items in your budget. For example, divide the cable annual amount, \$960, by 26. The result is \$36.92. Therefore, \$36.92 of every check should be applied immediately to your cable bill or held aside until the cable bill is due.

Pay your bills as they come due, either individually or as a group ahead of all due dates.

Track your actual expenditures and compare them to your budget on an ongoing basis. This is particularly important for variable expenses, where extra spending can put your budget out of balance. It is also important to note any changes in your fixed expenses and revise your budget accordingly; for example, if you add a new feature to your cellular phone plan, your cell phone bill will cost more on a regular basis than was originally planned for in your budget.

#### Tips

• Follow a weekly budget for areas in your budget where you have a tendency to overspend. For example, if you have budgeted \$100 per check for entertainment, set a budget for yourself of \$50 per week.