How To Create a Biweekly Budget in Just 4 Easy Steps | Bankrate (2024)

If you get paid every other week, which often comes out to twice a month, a biweekly budget may be right for you. This type of budget involves planning your spending and saving around each of your two-week pay periods.

A biweekly budget allows you to allocate portions of your expenses to each of your paychecks. This can be more effective than a monthly budget when it comes to paying all your bills on time, as well as reaching your savings goals and spending within your means.

What is a biweekly budget?

For anyone who is paid every other week, a biweekly budget can be the most straightforward way to manage your finances.

Because most bills are due once a month, a biweekly budget simply involves allocating funds from your first and second paydays to handle your bills in the first and second halves of the month, respectively.

Emily Guy Birken, co-author of “Stacked: Your Super-Serious Guide to Modern Money Management,” says a biweekly budget is a “bite-sized way to look at your money more often” than you would with a monthly budget.

“You have to check in on things when you get your paycheck, so if you realize you made a math error or forgot about an expense like school fees, it’s a lot easier to course-correct if you only have to think two weeks ahead — instead of a month — to get it fixed,” Guy Birken says.

Steps to create a biweekly budget

As with any type of budget, creating a biweekly budget involves listing your expenses and planning for when to pay each of your bills. You’ll also likely want to determine how much money you’ll devote to savings from each paycheck. Here’s how to set up a biweekly budget in just four basic steps:

1. Create a list of your income and expenses.

This can be done using a spreadsheet, a budgeting app or the old-fashioned method of writing it out with pen and paper. Like with a monthly budget, you’ll make a list of your fixed expenses as well as your variable ones. Also, list your income, including your paychecks and any money you receive from side gigs or other sources.

Fixed expenses: These are bills and other expenses that remain the same, so you know exactly how much money to allocate to them on a regular basis. Examples of fixed expenses include:

• Rent or mortgage
• Car payment
• Student loan payment
• Childcare
• Gym membership
• Streaming services

In addition, some fixed expenses are charged on a regular basis, but you may be billed quarterly or twice a year instead of every month. Be sure to add these to your list, as well. Examples include:

• Car insurance
• Property taxes
• Tuition

Variable expenses: These expenses can change regularly, so they aren’t as predictable as fixed expenses. As such, it can be harder to account for these in your budget. Examples of variable expenses include:

• Groceries
• Dining out
• Car repairs
• Home repairs
• Clothing
• Entertainment
• Medical bills
• Pet care

When incorporating variable expenses into your budget, it can be helpful to find averages for each one based on previous months’ spending. Because you have more control over many of your variable expenses than fixed ones, these are categories for which you may eventually decide you can cut back.

Income: List the amount of money that comes in each month, after taxes are taken out. This is the amount you have available for spending and saving. Account for your salary as well as any money that might come in from tips, commissions and side gigs.

Saving money: Once you’ve tallied your expenses and income, you can determine what’s left over to save. Many savers prefer to include a category in their budget for money that’s earmarked for savings — and to assign an amount to it, accordingly.

2. Put your expenses on a calendar.

For an easy view of your biweekly budget, list, on a monthly calendar, your paydays as well as bill due dates and other planned spending. This provides a handy snapshot of money coming into and leaving your account.

Whether you use a paper calendar or one on your computer or smartphone, visualizing when your expenses and paydays occur helps you better plan how to use each paycheck.

Tip: If you notice most of your bills are due toward either the start or the end of the month, you may be able to even things out by asking some of the payees to change when the bills are due every month.

3. Create two biweekly budgets.

Once you’ve established your income and expenses as well as when money is needed for each bill or other expense, set up two biweekly budgets. You can do this using pen and paper, a spreadsheet or a budgeting app. One method when using a spreadsheet is to create two separate tabs for each of the budgets.

To make these two budgets, list your income and expenses, along with corresponding paycheck dates and due dates. List the dollar amount next to each paycheck or expenditure. Refer to the calendar you created to determine which bills and other expenses fall under each pay period. You may decide to devote funds from both paychecks to certain larger expenses, such as your mortgage or rent.

During each pay period, look at the expenses you’ve assigned to that timeframe and make any non-automated bill payments at this time. If you don’t have automatic transfers set up to go to your savings account, initiate these transfers manually.

Tip: For bills that aren’t on autopay, create upcoming payment alerts so you receive reminders from your banking app or your smartphone when payments will soon be due.

4. Monitor your budget regularly.

Now that your biweekly budget is set up, refer to it frequently throughout the month. Things to take note of include:

• Spending: Are you spending more or less than you’d planned for things like dinner out, clothing or groceries? Adjust your spending accordingly, or consider increasing the amounts allocated to such categories during an upcoming pay period.
• Upcoming bills: Pay any bills that are due soon that aren’t on autopay.
• Saving: Be sure to transfer money into your savings account, as planned.

In addition to monitoring your budget, it often pays to balance your checking account regularly. Make sure the transaction amounts you have recorded match what’s listed when you log onto your bank’s website or app. This way, you’ll be able to catch any mistakes (on your part or that of the bank) as well as any fraudulent activity.

How to budget for non-monthly expenses

Whether you have a monthly or biweekly budget, you’ll likely have some bills that are paid on a non-monthly basis. For instance, bills that are paid quarterly or twice a year can include car insurance, property taxes and tuition.

It’s often a good idea to devote money every paycheck (or every month) to such expenses so the money is there when the bill is due. For this, consider a savings account that lets you set up savings categories or buckets. With such an account, you can devote money regularly to goals or expenses by naming categories such as “property taxes,” “car maintenance” or “vacation fund.”

Once a non-monthly bill comes due, simply transfer the money from your savings account to your checking so it can be paid.

Tip: Be sure to set up categories in your budget for regular, yet infrequent, expenses if you plan to transfer money for them to a savings account every month.

Advantages of a biweekly budget over a monthly budget

A biweekly budget often involves looking at your personal finances more often than you would with a monthly budget. This way, you may realize sooner if you’re overspending and make adjustments, accordingly.

“Biweekly budgeting is a much gentler approach [than monthly budgeting], and it makes sure you pay attention to your money more often,” Guy Birken says. “It’s like the difference between doing laundry once a month and doing it once a week.”

What’s the difference between biweekly and twice a month?

Being paid biweekly means receiving your paycheck every 14 days. Conversely, being paid twice per month typically involves receiving your paycheck on the 15th and 30th of each month.

The biweekly system will ultimately result in two months each year in which you receive a third paycheck, as you’ll be paid 26 times per year. Rather, the twice-per-month method involves 24 paychecks.

Note: If two people earn the same annual salary but one is paid biweekly and the other twice per month, the one who is paid biweekly simply receives less per check because there are two more checks per year.

What to do when you get a third monthly paycheck

Being paid biweekly means you’ll receive direct deposit or a paycheck every 14 days. As such, there will be two months each year in which you’ll get a third paycheck. For instance, if you’re paid every other Friday and there’s a month in which you get a check on the first of the month, chances are you’ll receive a third paycheck before that month ends.

With your budget in place, decide the best use for any “extra” money during this pay period that doesn’t need to go to bills. Some options for this money include:

• Add it to your emergency fund
• Move it to an investment account
• Make an extra mortgage payment
• Save it for your next vacation
• Set it aside for upcoming holiday spending

Bottom line

Creating a biweekly budget may take some work on your part initially, yet it’ll provide you with an efficient system for paying your bills, saving money and living within your means. For additional ways to strengthen your money management, consider strategies such as the 50/30/20 rule or a zero-based budget.