Before I started using the Paycheck Budgeting method our finances were on thin ice. I had tried every method out there. we had binders, accordion files, and hanging file systems organizing our bills, I had a large family calendar filled with bills to be paid, amounts due and when.
It was crazy. The day before a bill was due I would get on the computer and make the payment, every month. Between all the payments I was doing this over 10 times a month (Rent, phone, heat, electric, cable, garbage, debts…). It was a lot to keep track of.
However, as soon as I adopted paycheck budgeting our financial lives literally took a drastic change for the better.
Benefits of Paycheck Budgeting
- So easy to track your bill payments
- Only have to pay your bills twice a month (Instead of 10+ times)
- Never have late payments again
- Always know how much money you have on hand
- Stop overspending – which means you do not have enough to cover your bills
In the 2018 Financial Planner, I have a double page spread that breaks down your paycheck budgeting system!
How does Paycheck Budgeting work?
In summary: You divide ALL of your monthly bills into two groups. Try to divide them as evenly as possible – so each group total monthly payments are as close as possible.
I chose two groups because Scott is paid twice a month. (He gets two “extra” paychecks a month). So each paycheck (2 a month) is given one group.
The first paycheck of the month pays the first group of bills. The second paycheck of the month pays the second group of bills.
- 2018 Financial Planner!
- 9 signs you are headed into a financial disaster!
- The best budgeting technique I’ve ever tried!
- Getting out of debt … 6 Reasons why you are not making progress
- Debt Snowball Spreadsheet
- Why a $1,000 Emergency Fund is NOT Enough!
- Grocery Budget: How I Make It Work!
The KEY to paycheck budgeting working for you requires you to actually pay your bills the day or the day after you are paid. Otherwise, you can fall into the I spent all our money before paying the bills trap.
Paycheck Budgeting: Get Organized.
There are a few things you’ll want to do when setting up your paycheck budgeting.
1st: Organize your groups (First paycheck and Second paycheck)
2nd: Now that you have your groups you need to make sure that their due dates are LATER than the 16th of the month. Because even if you were paid on the last day of March – your first paycheck in April will be before the 16th of April. You need to do this so you won’t be charged any late fees in the future months.
3rd: If you know that you are not disciplined enough to make the payments the day you are paid or the day after you are paid setup automatic withdrawal from your bank to pay the bills without you doing anything.
A lot of banks can set it up so that they make the payment the day after your direct deposits hit. OR you can set it up to always be taken out on the same two days of the month.
To help you get started (Even if you already bought the 2018 Financial Planner) I am giving you this worksheet for free from my soon to be released Better Life Budget 2.0 E-course.
Click the image below to automatically download your Paycheck Budgeting Organizer!