How to Budget With Biweekly Paychecks

How to Budget With Biweekly Paychecks
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A biweekly pay period is one in which employees are paid every two weeks for their work. However, bills are generally figured on a monthly period, not a biweekly period, and weeks do not usually evenly divide into a month. This means approximately twice a year, employees paid biweekly receive three, not two, paychecks in a month. While you may be tempted to spend that extra paycheck on frivolous items, a good budget and long-term financial planning can turn those paychecks into savings, cars, vacations or even a home.

Creating the Budget

Write down on scratch paper your typical biweekly take-home pay amount. If you sometimes get overtime and bonuses, do not record those amounts here; instead, make a note off to the side of when you receive this irregular extra income and approximately how much you get.

Collect your monthly bill records. Find your last two months' bank statements; if you don't have paper copies, you can probably find them online. Set these in a pile.

Go through your bank statements and bills to identify all your regular monthly expenses, and record them in the appropriate expense spots on the worksheet. Double your regular biweekly paycheck and record that number as your monthly income. Highlight any bills that are a fixed amount that cannot be changed, like your mortgage and insurance. Also highlight your income. These are items that will not change as you develop your budget.

Add up your monthly bills and subtract them from your income. Record this number on a scrap of paper.

Track your non-bill spending for a month. Keep a notebook with you to write down expenditures. Save all your receipts in the manila envelope. Ensure that each receipt is dated and has adequate record of where and what you spent before storing it.

Go through your receipts and notebook at the end of the month. Divide them into categories of expenses: gas, day care, groceries, entertainment and work expenses, for instance. As you go through this information, highlight expenses you think you can easily cut, using a different color from Step 3. Record total monthly expenses from each category on your budget worksheet.

Look through your receipts and other information again, separating the items you can eliminate without real pain, like daily coffee shop coffee. Look for other ways you can save money that you don't mind implementing right away. Estimate how much these changes will save you each month. Recalculate your total monthly expenses, with these savings figured in, and place the figures in a "projected" expense column, if your budget worksheet has one. If not, write them in next to your current figures. Write down each habit or item you are going to change on a separate piece of paper, and place that piece of paper in your wallet in a prominent location.

Check to see if your budget is balanced as it is written now. If it is, you can stop. If not, repeat Step 7 for more savings. Repeat this until you have a balanced budget.

Revisit your budget every six months to make sure you are still in balance.

Saving Money

Write down long-term financial goals a healthy rate of savings can help you achieve, like a down payment on a house or a vacation.

Open a savings account and deposit any money left over each month from your regular budget. Always deposit this money out of your first paycheck each month before paying any bills or purchasing anything.

Take any money from bonuses and overtime. Deposit all of it in your savings account before thinking about how you could spend it. Do the same with other found money like prizes or tax refunds.

Deposit into savings your entire "extra" paycheck in months you have three instead of two biweekly paychecks.

Use your savings to pay other irregular but necessary expenses like property taxes or annual insurance premiums. For very large expenses like tuition, consider opening a new savings account and adding a monthly contribution to the account to your regular budget.

Review your goals and your level of savings every six months when you review your budget. Decide what changes you want to make or whether you are ready to implement a goal.


  • If you find you cannot stick to your budget, look for ways you can change it to make it more palatable to your lifestyle. If you have high credit card expenses, use your savings every six months to pay those down before fulfilling any goals, and then leave the credit cards at home. Revise your budget to reflect any changes this makes. If your budget is still problematic -- for instance, you don't make enough money to cover your expenses -- seek out credit counseling with a reputable credit counseling agency.


  • Do not take money out of savings to pay bills unless you absolutely must, except in the case of real emergencies like car breakdowns or sudden and unavoidable medical expenses.