Your employer just told you that they’re now going to pay you weekly. Sounds painless, right? It can be if you get ahead of it. Budgeting now, for the upcoming change in pay frequency, will save you headaches later.
Switch to only using your checking account. It’s good to avoid credit cards during a transition so that you can see what money is flowing in and out of your bank account in real time.
Request a Calendar Budget from your SmartPath Financial Coach (or simply print out a blank calendar template).
If using the SmartPath Calendar Budget, input the current month in numerical format, the current year, and your current bank account balance at top of the calendar.
Input your weekly paycheck amount on every payday date within the calendar.
On a sheet of paper, write down all of your bills, bill amounts, and due dates. Example: What day do you pay rent? What day do you pay utilities? What days do your subscriptions auto-bill?
Once you have all of your bills sorted out, it’s time to make a week by week budget. Input each of your monthly bills and all weekly variable spending to the appropriate date on the Calendar Budget. Look at this over a four week time period so you can have an entire month’s view of your budget.
If your money is positive each week, you have successfully adjusted for the new pay cycle. If you are forecasted to overdraft, then see these tips below (or schedule time to complete a 7X4 Budget Bootcamp Care Plan).
Tips and Tricks
Move your bill dates
If your rent, car payment, car insurance, electricity, cell phone, and internet bill are all due in the same week- call each company and ask them if they will move your due date to another paycheck week.
If you can’t move your due dates, find a way to cover the gap. Here’s how:
- Pull from savings and schedule a transfer back to savings for this amount next time you are paid.
- Use a credit card and pay it off in full on your next paycheck.
Plan for large or irregular expenses
If you have several large bills that are due, you may want to break them up over time. It’s all about spreading out all of your expenses so that you can make your payments on time.
If you cannot cover your rent or mortgage with one paycheck or a savings transfer into checking, see if your mortgage lender will allow you to pay your mortgage weekly.
Save up money
On weeks where you have any leftover money, transfer it to savings. When a large payment is due (such as your car payment), you can transfer this amount into your checking when your bill is due. Just make sure you place the extra money in an account that you won’t be tempted to dip into.
When you’re paid weekly, you’ll have some months when you’ll receive five paychecks instead of four. Budget based on receiving four paychecks each month and then use the fifth or “extra” paycheck to boost or address your financial goals (Tank #4 savings, paying down credit card bills, travel fund, etc.).