The Best Ways to Save Money on a Bi-Weekly Budget

When you create a household budget, you have the choice of creating a weekly, bi-weekly or monthly budget to take control of your spending and save for the future.

At Addition Financial, we find that many of our members prefer a bi-weekly budget. That may be because their employers pay them every other week and it’s easier to bring a household budget into alignment with your pay schedule than to try to work around it.

With that in mind, here are some tips and tricks to help you save money on a bi-weekly budget.

Pay Your Mortgage Bi-Weekly

One of the most difficult things about working with a bi-weekly budget is that your rent or mortgage payment is likely to completely erase one of your two monthly paychecks.

Instead of feeling like your paycheck is gone as soon as you get it, you may want to talk to your lender and see if they’ll let you pay your mortgage biweekly. (This is a little harder, but not impossible, with rent. Check with your landlord.)

Splitting your largest expense into two bi-weekly payments can help you grasp how much you’re spending and make it easier for you to stay within your budget and set some money aside for the future.

Create a Regular Schedule to Pay Bills

The next thing you can do to help yourself is to set up a regular schedule to pay your monthly bills. When you get paid every other week, you might be tempted to put off bills and pay them close to their due dates.

Instead of taking that approach, which can leave you feeling stressed out and unprepared, set up a schedule so that you pay your bills on time every month. Not only will this help you avoid late fees and keep your credit report in good shape, it will also eliminate financial stress and ensure that you stay on track with your bills.

We recommend picking one day every two weeks to pay your bills. For example, you might sit down every other Saturday and pay whatever is outstanding. If you’re consistent with this approach, then you’ll find that you can stay on top of your bills all the time.

Keep in mind, too, that you can call utility companies and credit card companies and ask to switch your billing date to make it easier to pay on time.

Don’t Count on Your “Extra” Paychecks

When you get paid bi-weekly, you’ll have two months a year when you’ll get three paychecks instead of two. Maybe the best trick for saving money on a bi-weekly budget is not to treat these “extra” paychecks like they’re dispensable.

Strive to stay within your regular bi-weekly budget by paying all your expenses from your bi-weekly checks twice a month. When one of those “extra” months comes along, consider doing one of the following with that extra paycheck:

• Pay down some of your outstanding debt
• Put the money into your retirement fund or a college fund for your kids
• Put some of the money into your savings account toward a family vacation or a future car purchase
• Build a buffer into your savings account

If you’re like most people, you’ve probably experienced a month when your checking balance slipped below a level where you’re comfortable. Leaving a one-paycheck buffer in your account will ensure that doesn’t happen.

Create an Emergency Fund

Any budget can be thrown into turmoil if you encounter a large and unexpected expense, such as your car breaking down or a mold problem in your home.

To minimize the chances that you’ll be left with an expense you can’t cover, we suggested creating a bi-weekly “bill” for an emergency fund. For example, you might decide to set aside 10% of your take-home pay for your emergency fund.

To ensure that you don’t miss funding the emergency fund, try creating an invoice for it – something that’s easy to do on any computer. If you don’t have a printer at home, you could go to an office-supply store and buy some pre-printed invoices.

Create the invoices and put them with your other bills as a reminder to move money from your checking account to savings. Alternatively, you could talk to your lender about splitting your direct deposit between your checking and savings accounts.

Give Yourself a Per-Paycheck Allowance

As you grow accustomed to living with your bi-weekly budget, you may find that it’s easy to spend more than you intend to when you have a buffer in your savings account.

The solution? Give yourself a weekly spending “allowance” outside of necessary items such as groceries and clothing. This money is yours to use as you wish – but when it’s gone, you’ll have no more discretionary spending until your next paycheck.

One of the best ways to ensure that you stick to your allowance is to take the money out of your checking account in cash. Any discretionary spending you do must use the cash you have on hand and when it’s gone, it’s gone.

It’s not difficult to save money on a bi-weekly budget, but it does require some careful planning and attention. Click here to learn more about Addition Financial’s savings accounts and how we can help you stick to your budget.