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A life you love on a budget you can afford.

Here on TBM®, I provide you with simple, easy-to-follow solutions to help you budget your money, pay off debt, save more, and crush your financial goals. But more than that, I give you the tools to start doing the things that matter most to you, on a budget that actually works!

Why I Budget Paycheck To Paycheck

March 10, 2016
Budget Guides

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Welcome to my world! I am a paycheck to paycheck budgeter. I am a true believer in zero-based budgeting. In fact, I believe it is one of the main reasons I was able to take control of my financial beast. If most or all of your income is entirely focused on your paychecks, shouldn’t your expenses also be focused on your paychecks too? Click to read about why I budget paycheck to paycheck.

Welcome to my world! I am a paycheck to paycheck budgeter. I am a true believer in zero-based budgeting. In fact, I believe it is one of the main reasons I was able to take control of my financial beast. If most or all of your income is entirely focused on your paychecks, shouldn’t your expenses also be focused on your paychecks too? Like I have said before, this is the game of life, stuff happens and things are not neatly packaged into perfect monthly expenses. You need to be able to roll with the punches and make changes that are necessary due to life’s unexpected presents.

Paycheck to paycheck budgeting is a perfect tool if you get paid bi-monthly. Breaking up your expenses to focus on your paychecks works like a charm and allows you to also deal with life’s mishaps. So how do you go about starting a paycheck to paycheck budget?

Using the calendar method with paycheck to paycheck budgeting is simple and great for people who like to visualize the month. It is also a great visual to decide what bills you have to pay with what paychecks. The example below is a simple visual to show you the power of the calendar method for paycheck to paycheck budgeting. Knowing what expenses you have to pay with the upcoming paycheck and learning how much “extra” money you have left over for variable expenses allows you to allocate your money more wisely.

Example Calendar

Any “extra” money you have left over from each paycheck needs to have a job. You will need this extra money to pay for your variable expenses such as gas, food, clothes, and those morning coffee runs. After you allocate your extra money to a “job”, you should end up with income – expenses = $0 (hence the name zero-based budgeting).

One of the advantages of paycheck to paycheck budgeting is being able to plan for that annual or semi-annual bill you might have. For example, you might decide to pay your car insurance every 6 months and not every month. Take the amount of the bill and divide it by the number of pay periods you’ll receive until the next bill is due. This will allow you to set aside that amount each pay period until you have accumulated enough to pay the entire bill. You may not realize it, but when you don’t have enough to cover a big expense or annual bill, it is usually because you earned the money in another pay period; it was just never set aside.

I have learned over the years that this budgeting method is not something I do because I am poor or because I can’t live on last month’s income. I do it because it makes the most sense. When you type “paycheck to paycheck” into Google, you will see results such as Stop living paycheck to paycheck, how to step away from paycheck to paycheck budgeting, and how to break the living paycheck to paycheck cycle. So you have to ask, why is it so frowned upon? Most of the time, the term “paycheck to paycheck” is associated with being poor. It used to suggest or hint that the person using this method has to stick to a “strict” budget to survive. This is far from the truth. Some of the wealthiest people use the paycheck to paycheck method because it gives them the freedom to allocate their money the way they want. If you budget paycheck to paycheck knowing that a huge chunk is going towards a future financial goal, that’s a success. A lot of people tell me they don’t even know where their paycheck goes, it just disappears. Just because you are rich with money, doesn’t make you rich when it comes to funding future financial goals. Making $900,000 a year doesn’t fund your retirement, or pay for your child’s education. It does not put money into savings or invest it in your future – it’s just money that you earn and you choose how to spend it. Paycheck to paycheck budgeting will allow you to achieve what it truly means to be rich.

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Filed Under: Tagged With: BUDGET, BUDGET GUIDES, BUDGET TIPS

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Comments

  1. NZ Muse says

    May 5, 2016 at 8:23 pm

    This was absolutely the key for me! Once I figured this out, everything fell into place. Now I’m salaried it’s fine, but back then on a low wage with varying pay coming in every week … it was a nightmare.

    • kumiko Ehrmantraut says

      May 6, 2016 at 7:51 am

      Yes! Budgeting paycheck to paycheck is a great way to stay organized and to keep track of your bills. Thanks for the comment!

      • Vera says

        July 23, 2017 at 8:33 am

        Thks for sharing, I am going to give it a try…?

  2. Leslie says

    May 8, 2016 at 7:54 am

    Yes! Budgeting per paycheck makes so much more sense to me. That is the way I’ve always done my budgets. It seems like if you do a monthly budget you could run out of money before your 2nd paycheck comes for the month.

  3. Megan says

    June 23, 2016 at 5:17 am

    LOVE THIS! I have always budgeted this way and kinda went with the templates people on pinterest have done! Thanks now I have an actual template I can follow and get!

    • kumiko Ehrmantraut says

      June 27, 2016 at 2:45 pm

      I am so glad it helped Megan!

  4. Lucrece says

    July 22, 2016 at 8:42 am

    How do you budget on 11 dollars a hour. I can seem to budget right. Please help!!

    • kumiko Ehrmantraut says

      July 22, 2016 at 9:18 am

      Lucrece, I know the feeling of not making much and trying to budget. I did it for nearly 7 years before I jumped into the world of finance. I feel you and I hear you! It’s hard and it takes some time to figure out. Trust me when I say this, you are not alone.

      The very first thing you need to do is figure out your expenses. What exactly are you spending your money on every single month? What expenses are certain? These are expenses that you pay every month and they never change. Things like your mortgage/rent, car payment, utilities, cell phones etc.. You also have to figure out what other things you are spending money on. Things like clothes, food, and clothing. These are expenses that change from month to month.

      Add up your expenses and compare that amount to your take home income. Are you in the red or green? If you are in the red it’s OK. Look at your expenses and see where you can reduce. Look at budgeting as tracking your money. Where is it going? Then set up a plan from there.

      You really have to know your finances on a very personal level. I will make sure to address this question in an upcoming blog post. If you have any further questions, or just need someone to talk to about the frustrations you are having, please reach out. You can always reach me through the contact page on the blog or by emailing me at TheBudgetMom@gmail.com. Here is a post on how to set up a budget step by step, with pictures.

      https://budgetmom.wpengine.com/how-to-create-a-budget-when-you-really-dont-want-to/

      This might help as well. You can do this! I know it’s easy to feel down, but you really can learn how to budget with a low income. It’s all about making the most out of the money you do have. $11/hr may not seem like much, but it can go a long way. Keep your head up!

  5. Annah says

    August 14, 2016 at 7:43 am

    Love the article. This is how I do our household budget. I set a base pay budget (no over-time or travel pay added in). Then I figure what we can afford off of the base salary. Then under that I add any extra income from over-time and anything else. This usually gets allocated to debt payoff, and any extras like entertainment or gift funds.

    • kumiko Ehrmantraut says

      August 14, 2016 at 1:15 pm

      I love that Annah! That’s exactly how we budget too! It works the best for us!

  6. Robin says

    August 14, 2016 at 3:20 pm

    Great post, I like the way you show it on the calendar its paycheck and then monthly bills and what get s paid when. I like this idea I am looking for a new way to budget this may be it for me.
    Thanks
    Robin

    • kumiko Ehrmantraut says

      August 22, 2016 at 9:16 am

      I am so glad it helped Robin!

  7. Marie says

    December 1, 2016 at 8:12 pm

    How do you create a paycheck to paycheck budget if one spouse gets paid bi-weekly and the other weekly? I’m having trouble figuring out what bills to pay from what check since they changed my husband’s pay from bi-weekly to weekly. Thank you.

  8. Olivia says

    January 7, 2017 at 4:37 am

    I love a week by week budget. Just a question , if you’r wanting to smash out some debt/a loan , would you bother saving or would you put every extra cent you have into paying it off ?

    • kumiko Ehrmantraut says

      January 7, 2017 at 11:45 am

      Hello, Olivia. If you are wanting to pay off debt I suggest you come up with a debt repayment plan. Here are two articles that might help:

      https://www.thebudgetmom.com//debt-snowball-method/
      https://www.thebudgetmom.com//how-to-pay-down-debt-using-the-avalanche-method/

      Once you have your repayment plan, then I would throw any left over money from your budget into your repayment plan.

  9. Christine says

    April 11, 2017 at 2:23 pm

    I am excited to discipline myself finally after talking about it for months. Today is the day I start my financial balance. Thank you

  10. Laurie says

    April 29, 2017 at 4:38 pm

    GreT article! That’s exactly how I budget and felt bad about it! Thank you so much, it’s also a lot easier on my brain to budget this way!

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    July 9, 2017 at 8:56 pm

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  12. MsA says

    July 26, 2017 at 6:05 pm

    WOW! Thanks for all the great n smart ideas!
    Im excited to get started!

Hello, I'm Kumiko, but everyone just calls me Miko. Welcome to my blog, The Budget Mom. I am an Accredited Financial Counselor® , and mom to a rambunctious boy. Come along with me as I strive to live a life I love on a budget that I can afford. Read more about me.

RECENT YOUTUBE VIDEO

The Budget Mom

The Budget Mom
It’s time for another Real Life Budget. I asked my readers to submit their REAL information. Real spending, real debt, and real savings goals.

I am taking those real-life numbers and showing you how I would organize and budget that information using my Budget By Paycheck® Method.

If you would like to submit your budget information to possibly be picked for a Real Life Budget that we will show on YouTube, please reach out to budgets@thebudgetmom.com.

Diane is a single mom who is a Database Administrator for an IT Department at a local college. She lives in Queens, NY, and eventually wants to move to a lower-cost of living area in the future. 

Diane submitted her information because she is struggling to organize and tackle all of her larger short-term goals.

CHAPTERS:
00:00 Introduction
02:15 Why & Personal Story
04:20 Income 
04:37 Fixed Expenses
05:48 Variable Expenses
06:31 Debt
07:53 Savings Goals
10:18 Budget By Paycheck Method
14:51 My Recommendations

➡️ HOW I TRACK MY SPENDING: https://bit.ly/3aIe89I
➡️ HOW TO USE A BUDGET CALENDAR: https://bit.ly/2IzF2Vj
➡️ FINDING YOUR WHY: https://bit.ly/3aJUryj
➡️ THE BUDGET MOM'S FINANCIAL FREEDOM STEPS: https://bit.ly/3cfJXsp
➡️ HOW TO GET STARTED WITH THE CASH ENVELOPE METHOD: https://bit.ly/2vQJaO5
➡️ HOW TO CREATE A PLAN OF ATTACK TO PAY OFF DEBT: https://bit.ly/2wDETxF

ABOUT ME

Kumiko Love is a single mom who empowers women everywhere to regain control of their financial lives. An Accredited Financial Counselor with over nine years of experience in the finance industry, she founded The Budget Mom, a community of millions of women on a path to financial fulfillment.

She's also the creator of the wildly popular Live Rich Planner® and Budget by Paycheck® Workbook. Love has been featured on Good Morning America, the Today show, CNN, CBS, ABC and in USA Today, US News, World Report, Huffington Post, Money Magazine, Parents Magazine, the Washington Post, and Real Simple. She lives in Spokane Valley, Washington.

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