Most of the time, traditional workers are paid on a semi-monthly basis. Some of these workers who receive bi-weekly paychecks are employees in sales or real estate agents and many more. For an employee who receives a semi-monthly paycheck, it can be difficult for him/her to plan a budget. Budgeting is necessary since you will be able to free extra cash that you can spend on items that you may find difficult to afford. This article contains steps that will guide you in the right direction on managing your biweekly Paycheck.
How to plan the bi-weekly budget?
Being a semi-monthly employee means you receive two paychecks every month. The first thing that should come to your mind after receiving your first Paycheck is the basic needs that will sustain you. With this first paycheque, consider your rent/mortgage, utilities such as food, clothing, medical bills, among other basic needs. If your first paycheque did not satisfy your basic needs, move to the second paycheque.
The main idea in a bi-weekly budget is to fulfill your basic needs. After that, you should consider covering your loans. Start with loans that have a high-interest rate. If you still have cash left, put them in emergency funds. Emergency funds can be used to tackle inflation, for example, in the foodstuff budget. And planning a vacation should the last option.
First bi-weekly Paycheck
Design a Budget plan that assumes you are paid semi-monthly.
The first step is to make a budget framework that is based on a biweekly payment schedule. This is crucial since you will be needed to cater to the essential bills first
Get ahead on bills
This is your main idea; go ahead on bills. If you are capable of prepaying some bills, it is good since it will reduce anxiety in the coming months. Your bills include your rent, your mobile phone, and others. Consider prepaying all the utilities such as foodstuff, clothing, and other basic needs to reduce the load. Since managing a bi-weekly budget is hard, it will relieve your anxiety since you know your first priority needs have been handled.
Pay your high-interest bills
Most people are not comfortable knowing that you owe someone or an organization. Get rid of your high-rate debt, which is mostly your credit card debt. You should make a list of your debts in an organized way by considering the annual percentage rate. By paying off the bills from the one with the highest rate will save you a fortune since you will be paying bills that carry a bigger balance. Also, paying the few low annual percentages rate and the low balance debt will ensure you gain momentum and other financial benefits.
Second bi-weekly Paycheck
If you’re contented with how you have managed your first Paycheck, it is now the time to plan for your second Paycheck. With this money, your first priority will be setting aside an emergency fund. A vacation will be the last option, but it is still important so as to break your routine and have time to strengthen family bonds. Below are things to consider with your second paycheque.
Create an emergency fund
An emergency fund created for three to six months of your regular expenses tackle financial setbacks, including a medical emergency or a lost job without necessarily needing to take a new debt. You should keep these funds a pat from your regular savings account and will help you reduce the temptation of dipping into the emergency saving account.
Save for a big goal: Goals are what keep us moving. If you want to save for a goal example, a home or a car or adding to your retirement account is good. If you are free of debts, you will be able to focus on the goal. The best way is to transfer your extra Paycheck from your checking account to your savings.
Fund much needed rewards: When you are paid semi-monthly, you should keep in mind that managing your money is not only about your dollars. Emotions play a part in your finances, and they are the cause of decision making. You may need a vacation from your daily routine; for example, you may need a date night to your favorite restaurant. You should set aside a token for this purpose.
Templates are very important since they save you the time and effort required when generating an accurate budget plan. They are also accurate in generating accurate company payroll. Each template has its own unique design and has been designed by professionals. These biweekly templates are also able to calculate overtime pay automatically.
In conclusion, when you are a semi-monthly worker, it means you are paid twice a month. Breaking down your plans as per this article will help you minimize overspending on unnecessary stuff. You should be able to manage your Paycheck appropriately by creating a budget that will enable you to save automatically and track your spending. To be able to put your savings away, you should try as much as possible to avoid debts and always make a plan.