Home Finances: How to schedule Monthly Bills with a Weekly Paycheck
When I started work for a new company back in 2000, they had a wonderful system where we'd get paid on the 15th of the month and on the last day of the month. 2 checks a month, 24 per year. They were predictable, and we never had to handle the situation with 3 checks in a month. Scheduling bills, loan payments, charitiable contributions, etc., was simple-- some became "check #1 bills" and the rest were "check #2 bills". If too many due dates fell in one half of a month, a few calls to the banks and you were able to spread out the payments evenly.
Unfortunately, they changed the system the year I started there and now they, like my current job, and many others, pay biweekly. That means the pay dates are sliding through the months and twice a year you have three paychecks in a month. There are at least three ways of handling this--
1) Don't. That is, when you get paid, line up the bills with the money and make the call on what to pay and what to defer. I really, really, don't recommend this because it's constantly a moving target. You may have two weeks with nothing due and two weeks with more than your salary due. It's dangerous to just "wing it".
2) Write down your paydays and check amount for each payday of the year. Then, write down the due dates of the various bills. This is not much different than #1, but it has the distinct advantage that you are planning for the bi-weekly feasts (no bills) and famines (too many bills).
3) Another option is to add up the monthly bills and then figure out how much you'll need to set aside each paycheck. That is, suppose the monthly bills add up to $1500. Annually, that's 18 grand, or 692.31 per paycheck if you are paid bi-weekly. Each payday, transfer that $692.31 to a bill paying account and then pay the bills from that account. You can even simply transfer this into another bookkeeping account if you use Quicken or other financial software. There may be some extra money required to set this up, but once you get going, paying your bills can be a predictable, if not enjoyable, experience.
Unfortunately, they changed the system the year I started there and now they, like my current job, and many others, pay biweekly. That means the pay dates are sliding through the months and twice a year you have three paychecks in a month. There are at least three ways of handling this--
1) Don't. That is, when you get paid, line up the bills with the money and make the call on what to pay and what to defer. I really, really, don't recommend this because it's constantly a moving target. You may have two weeks with nothing due and two weeks with more than your salary due. It's dangerous to just "wing it".
2) Write down your paydays and check amount for each payday of the year. Then, write down the due dates of the various bills. This is not much different than #1, but it has the distinct advantage that you are planning for the bi-weekly feasts (no bills) and famines (too many bills).
3) Another option is to add up the monthly bills and then figure out how much you'll need to set aside each paycheck. That is, suppose the monthly bills add up to $1500. Annually, that's 18 grand, or 692.31 per paycheck if you are paid bi-weekly. Each payday, transfer that $692.31 to a bill paying account and then pay the bills from that account. You can even simply transfer this into another bookkeeping account if you use Quicken or other financial software. There may be some extra money required to set this up, but once you get going, paying your bills can be a predictable, if not enjoyable, experience.
