Most budgets work on a monthly basis. If you’re paid every two weeks, a biweekly budget just makes sense.
Breaking down your expenses based on each paycheck might be easier than budgeting for an entire month.
This article shows you how to create a biweekly budget that works for you.
What is a biweekly budget?
A biweekly budget is a budget plan based on two weeks’ worth of income and expenses. With this budgeting plan, you divide your monthly budget into two payments.
There are four main ways salary workers typically get paid:
- Twice per month
There are actually about 4.345 weeks in each month, so the biweekly and twice-per-month pay schedules differ in how many paychecks you receive each year.
With biweekly, you’ll get 26 paychecks. With twice-per-month, you’ll get 24.
This distinction is also important when it comes to how your budget works. With a biweekly budget, you’ll have ten months with two paychecks and two months with three.
That means you’ll need to adjust your budget accordingly depending on the month, which is a bit more complex than a traditional monthly budget.
Pros and Cons of a Biweekly Budget
Like any budget, the biweekly budget isn’t for everyone. Some of us prefer to budget on a weekly basis to account for expenses like food and entertainment while others prefer to work on a monthly basis.
Personal finance is all about finding what works for you, which is why you should consider the following pros and cons before diving head-first into biweekly budgeting.
Pros of a Biweekly Budget
- Accounts for the exact timing of your paychecks
- Gives you greater flexibility for unexpected events or expenses
- Months with three checks give you more wiggle room for budgeting (or “free money”)
- Tracking bill payments and times (which aren’t always the same each month) is easier
Cons of a Biweekly Budget
- Takes a bit longer to set up
- Requires more time and effort to keep up with budget adjustments
- You might have to live more frugally during your three-check months
- Difficult to accommodate for inconsistent income sources, like freelancing or side gigs
How to Create a Biweekly Budget (Step-by-Step Guide)
If the biweekly budget speaks to you, follow this five-step guide to get started.
1. Map out your expenses.
Just like a monthly budget, your first step to creating a biweekly budget is taking inventory of your expenses. This includes fixed expenses (e.g., your bills) and your variable expenses (e.g., groceries and entertainment).
It helps to print your bank and credit card statements from the last three months to identify and quantify repeat purchases.
Most people have some or all of the following expenses:
- Internet and phone
- Health care
- Pet and childcare
- Transportation and insurance
- Debt repayment
To better understand your spending habits, determine the average amount you spend in discretionary areas like entertainment, retail, and restaurants. This will help you create categories for your expenses beyond just fixed costs.
If you haven’t been sticking to a budget, you may need to reduce spending in these areas to save money and avoid debt. Focus on getting a clear understanding of your current spending habits without any changes for now.
2. Create a budget calendar for your expenses.
The tricky part of biweekly budgeting: Bills are often sporadically due throughout the month. So you need to ensure you’re budgeting for the right bills at the right time.
To simplify it: Add your fixed bills to a calendar to visualize them and allocate money accordingly. It’s as simple as opening up a digital calendar, entering your expenses by date, repeating them monthly, and setting reminders. If it helps, you can print it out.
If most of your bills come due around the same time (e.g., the beginning of the month), see whether you have the ability to choose when you pay them. You may be able to spread out your expenses by adjusting your payment due dates. That way, your bills occur throughout the month.
If you can’t (or don’t want to) do this, you can still allocate a portion of each paycheck to these expenses. You Need a Budget (YNAB) is a great app for this—it lets you “age your money” by setting aside a portion of each paycheck for upcoming bills.
This approach has the added advantage of helping you stay on top of your bills and avoiding the uneven distribution of spending money across different pay periods. This can simplify the process of adopting a spending-saving routine that can be maintained in the long term.
3. Divide and conquer when budgeting your fixed expenses.
Now that you’ve created a budget calendar and identified all your fixed expenses, it’s time to allocate some cash. You can do this one of two ways:
A) Allocate the same amount from each paycheck to fixed expenses.
You’ll need to divide all the monthly costs by two and allocate that much from each paycheck. If you have multiple bills due on different dates, break this down into two columns for your two paychecks:
- Paycheck 1: (list expenses and their respective amounts)
- Paycheck 2: (list expenses and their respective amounts)
B) Allocate the amount due for each bill to the paycheck closest to its due date.
For example, if your rent is due on the 10th of every month, allocate that full amount from your first paycheck of the month.
This strategy only works if you have enough money in the paycheck closest to the bill due date. If your paychecks are only a couple thousand every month, dedicating your first paycheck to rent every month defeats the purpose of using this budgeting strategy in the first place.
4. Create separate spending allocations for variable expenses.
While fixed expenses should stay the same (for the most part), variable costs can vary from month to month. To keep track, create a spending section for each variable expense—groceries, entertainment, gifts, and the like—with a certain amount allocated from each paycheck.
For example, if your monthly dining out budget is $200, you can divide it into two pay periods by setting a budget of $100 for each period.
Repeat this approach for all other budget categories, including savings.
5. Add a buffer.
You’ll be more likely to stick with a biweekly budget if you know there’s an allotted amount for fun stuff. After all, budgeting doesn’t mean giving up your favorite hobbies.
Think of the “buffer” as your savings or emergency fund. It’s a bit of extra money you can use for unexpected expenses (or if you just need to treat yourself). Like the above, either allocate it from one paycheck or save it from both.
Tracking Your Spending With a Biweekly Budget
Once you’ve created your biweekly budget, it’s important to track how much you’re spending across all categories. You can do this in a notebook or spreadsheet, but there are lots of apps that make the process easier.
YNAB and Mint both offer bill-tracking and budgeting tools. You can also use them to set up alerts when bills are due or when you’re overspending in a given area.
Biweekly Budgeting Tips to Help You Save Money
Setting up a biweekly budget isn’t that difficult, but it does take some planning and discipline. Here are a few tips to make sure you stick with it:
- Keep your goals in mind. Whether you’re saving up for a dream vacation or simply trying to get out of debt, remind yourself why you started budgeting in the first place.
- Automate your payments as much as possible. This way, you won’t have to manually transfer money from different accounts when bills are due.
- Review your budget regularly. Every couple of months, review your expenses and adjust accordingly.
- Make saving a priority. Commit to setting aside at least 10-20% of your paycheck towards savings every month—this will help you build a cushion in the event of an emergency.
- Use three-check months to your advantage. When you’re budgeting, you’ll account for two paychecks each month. This means you’ll have extra money during three-check months. For lack of a better way to put this: Don’t waste it.
If biweekly budgeting is calling your name, you’ll love having a few thousand dollars extra a couple of months out of the year.
But being successful with a biweekly budget requires discipline, commitment, and tracking.
With some planning and practice, however, you should be able to master it—and start seeing the financial benefits in no time.