Looking to spend less and save more?
Our printable budget binder can help!
We collect, use, and PROTECT your data in accordance with our Privacy Policy.
Half Payment Budget Method
Break the Paycheck to Paycheck Cycle
You’ve tried countless budgeting methods and you just seem to fall short in making your money stretch until the next payday. The half payment budget method may offer you a solution.
(This post may contain affiliate links. What does that mean to you? Well, if you click on a product and make a purchase, I may receive some compensation at NO charge to you. If you want to read the boring stuff from my full disclosure can be found here.)
If you scroll through Pinterest or search Google, you will find countless ways to budget and improve your finances. But are any of these methods the RIGHT budget for you?
How many times have you attempted to budget just to give up?
So many of us live paycheck to paycheck with no end to this cycle in sight. You can micromanage your money and still see yourself coming up short after all of your bills are paid. If you are looking for a way out of this cycle, the half payment budget method might be the answer you are looking for.
If you are struggling to make ends meet and are broke broke (I’m sure you know what I mean by this), you might want to read How to Save Money When You are Broke as Hell. Here I give you actionable tips to help you find ways to save money and build an emergency savings fund.
What is the half payment budget method
Simply explained, it’s where you take your regular recurring bills and divide them in half. Each payday, you set aside the “half payment” and make the full payment when the bill is due.
I want to be perfectly clear here. I am not suggesting that you to make two payments per month. I am simply saying to divide your bills in half each pay period and set aside the allocated amount of funds until you have the full payment ready. Don’t worry, I will give you a few examples below.
Basically, you hold on to your half payment until you have combined it with another half payment from your second payday.
How the half payment budget method works
Let’s look at this method in action.
Your monthly recurring bills:
- rent/mortgage: $1,100
- vehicle payment: $450
- auto insurance: $100
Total recurring monthly payments: $1,650
Scenario #1
Paycheck #1 $1,250
Rent/Mortgage $1,100
Leftover $150
Paycheck #2 $1,250
Car Payment $450
Car Insurance $100
Leftover $700
In total, you have $850 leftover for the month. But if you look at it by pay period, you only have $150 left over to make it until your second paycheck of the month. OUCH! That’s barely enough to cover food!
Scenario #2
Paycheck #1 $1,250
1/2 Rent/Mortgage $550
1/2 Car Payment $225
1/2 Car Insurance $50
Leftover $425
Paycheck #2 $1,250
1/2 Rent/Mortgage $550
1/2 Car Payment $225
1/2 Car Insurance $50
Leftover $425
**Combine your half payments and pay your bills on time.**
In both scenarios, you have the same amount ($850) leftover for your other expenses, however, the half payment budget method gives you a manageable amount leftover at each pay period.
If you are paid weekly, you can adjust and use this system with a quarterly method.
How to start the half payment budget method
I do not suggest jumping into this budgeting method all at once. You need to ease into the system and see if it works for you.
Start this system with the pay period in which you have the least amount of bills due and start with one bill. I would suggest starting with your car payment and work with that payment for a month or so to get the hang of things.
Once you see how the half payment budget method works, you can begin transitioning all of your bills to this system.
How you choose to “set aside” your money is really up to you and will definitely take a degree of self-discipline. Many banks allow you to open separate accounts or holding accounts which may be used.
I prefer the simple envelope method. I use these
Looking to spend less and save more?
Our printable budget binder can help!
We collect, use, and PROTECT your data in accordance with our Privacy Policy.
Why the half payment budget method works
For many of us, we have one paycheck that is heavier on the bill payment side than the other(s). If you look at the first scenario, you will see an example of this.
That HEAVIER bill paycheck is very tight with little to no wiggle room…so no errors or emergencies.
When you change over to the half payment budget method, you are still paying your bills once a month, but you are just pulling the funds from your account a little differently. You still have the same income. You still have the same total of disposable income. You have just adjusted your budgeting to make this total equally dispersed.
Do you use the half payment budget method to tackle your recurring bills? I would love to hear any tips I haven’t covered.
If you are at a loss as to where your money is going, be sure to read my post How to Track Your Spending and Stick to Your Budget. Here you will find useful tips on how to see exactly where your money is being absorbed.
Don’t forget to share the love by pinning to Pinterest!
