It’s so frustrating to know that on paper you make enough to cover your expenses with even a little cushion for additional spending…BUT for some reason, you’re having the hardest time paying all of your bills and having food on the table. The half payment budget method may be your solution to break the paycheck to paycheck cycle and help you make ends meet without a stress level overload.
(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.)
Let’s face it, you’ve seen and have tried countless ways to budget and improve your finances. But are any of these methods the RIGHT one for you? You’re probably thinking, “NOPE!” since none have worked out in the past. You may have even given up.
So how many times have you attempted to budget just to give up?
Living paycheck to paycheck just seems to be your way of life when you are paid biweekly. You want a way out but can’t find anything that works for you.
Do you micromanage your money and still see yourself coming up short after all of your bills are paid on their due date.
Are you nodding yes?
Regardless of income, so many of us live paycheck to paycheck and have a hard time finding extra money. You’re not alone in this struggle!
I wore those shoes and walked mile after mile in them. That is until I discovered a way to pay ALL of my bills on time and still end up with money left over each paycheck using this easy monthly budget.
If you are looking for a way out of this cycle and are paid biweekly, the half payment budget method might be the answer you’re looking for. Yes, you do see the dreaded word BUDGET there.
Wait…don’t jump off of this page because I said BUDGET. The key to getting out of debt and living within or below your means is finding a budget that works for you. You can groan now but trust me, it’s really the only way.
If you are struggling to make ends meet and are broke broke…not the broke where you still get your nails done…the broke where you aren’t able to cover your bills, you might want to read How to Save Money When You are Broke as Hell. Here you will gain actionable tips to help you find ways to save money and build an emergency savings fund.
What is the half payment budget method
The half payment budget or biweekly pay budget is really a simple concept that takes a little extra planning to get started. But once you get this method working, you will finally breathe a sigh of relief when you’re properly managing your money and you may even find a way to build your emergency fund and even have extra for your savings account. Doesn’t that sound GREAT?!
Basically, the half payment plan is where you take your regular, recurring bills and divide them in half and save these halves from your two paychecks to pay your bills ON TIME.
Yes! Each payday, you set aside the “half payment” and make the full payment when the bill is due.
Just hold on to your “half payment” until you have combined it with another “half payment” from your second payday.
I like to pair the half payment method with the cash envelope budget system. Putting these two methods together has made it easy for me to take control of my expenses and prevent overspending. If you would like to learn more about the cash envelope budget system, you can read that article HERE.
I want to be perfectly clear here. I’m not suggesting that you make two payments per month. I’m simply saying to divide your bills in half each pay period and hang on to the money until you have the full payment ready. Don’t worry, I’ll give you a few examples below.
How the half payment budget method works
Let’s look at this method in action.
Your monthly recurring bills:
Monthly income $2750
- rent/mortgage: $900 due on the 1st of the month
- car payment: $350 due on the 5th of the month
- auto insurance: $100 due on the 15th of the month
- loan payment: $130 due on the 25th of the month
- childcare: $300 due on the 1st of the month
- cable/internet: $90 due on the 20th of the month
- phone: $110 due on the 11th of the month
**Please note that your utility payment is not included. This is not a fixed expense and fluctuates each month. Take this payment out of your remaining money.
Total recurring monthly payments: $1,980
Money remaining monthly: $770
Example Budget #1
$1,375 – Paycheck #1 paid on the 1st
- rent: $900
- car: $350
- childcare: $300
- phone: $110
- money remaining: -$285
$1,375 – Paycheck #2 paid on the 15th
- insurance: $100
- loan payment: $130
- cable/internet: $90
- money remaining: $1,055
Well, that doesn’t seem to work out.
At the beginning of the month, you can’t cover all of your expenses and don’t even think about putting food on the table. OUCH! And at the end of the month, you’re lulled into a false sense of having lots of EXTRA SPENDING MONEY when that isn’t reality.
The half payment budget method balances all of this out.
Example Budget #2 The Half Payment Method
$1,375 – Paycheck #1 paid on the 1st
- rent/mortgage: $450
- car payment: $175
- auto insurance: $50
- loan payment: $65
- childcare: $150
- cable/internet: $45
- phone: $55
- money remaining: $385
$1,250 – Paycheck #2 paid on the 15th
- rent/mortgage: $450
- car payment: $175
- auto insurance: $50
- loan payment: $65
- childcare: $150
- cable/internet: $45
- phone: $55
- money remaining: $385
Combine your half payments and pay your bills on time.
Now isn’t this better?!
You still have the same $770 remaining for the month but using this method, you have an equal amount of leftover monies from each paycheck.
**If you are paid weekly, you can adjust and use this system with a quarterly method by dividing your bills by 4 and working the method that way.**
Pros and Cons of the Half Payment Budget Method
The Pros:
- A consistent way to track your budget.
- You’re less tempted to overspend when you know exactly how much you have and need.
- You don’t have to use credit cards, or worse, payday loans to cover your bills.
- Relieves stress by balancing your expenses.
- Helps you see where all of your money goes by having this method on paper.
The Cons:
- You have to keep track of your half payments.
- You have to train yourself to not touch your half payments.
- You need to get a half a month ahead to begin this method.
RELATED POST: How To Properly Budget Your Monthly Salary
How to start the half payment budget method
I don’t suggest jumping into this budgeting method all at once.
You’ll need to ease into the system to see if it works for you. Starting might have you tightening your belt a little more, in the beginning, to get the flow going. But this will ease up after you have it all working properly.
You should start with the pay period where you have the least amount of bills due and start with only one expense. I 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 that may be used.
I prefer a simple envelope method. I use these
RELATED POST: Stop Overspending with the Cash Envelope Budget System
Why the half payment budget method works
Many of us have that one pay period that is heavier on the expense side than the other(s). We all seem to live the 1st example above.
That HEAVIER bill paycheck is very tight with little to no wiggle room or even impossible…so no errors or emergencies.
This can even result in the need for paying bills with credit cards or relying on payday loans to help out. The latter also ends up being a vicious cycle that is almost impossible to get out of.
When you change over to the half payment budget method, you’re still paying your bills once a month, but you’re 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.
The half payment method helps you to visualize your budget and take control of your spending. It requires you to become more disciplined with your spending…but this is a good adulting thing.
I’m a firm believer in having your budget on paper and at your fingertips so you always know exactly where your money is going and your remaining balance. Having amounts in your head or guessing isn’t a fail-proof system in taking control of your finances.
Often we feel if we could just make a little more each month our financial woes would lessen. Unfortunately, that isn’t true if you don’t know how to manage the money you have. More money without the proper budget will keep you in the same place. And we don’t want that!
Making the necessary changes is an important step in gaining peace of mind when it comes to your finances and achieving your goals.
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’ll find useful tips on how to see exactly where your money is being absorbed.
Hi Jada! Nice article. I also do my budget the same way. I get paid weekly so I divide my monthly bills by 4. I also have a second checking account so when I get paid I transfer the amount of money over to that account so I don’t touch it. It’s been working great for me and now I am able to put money in my savings every week. And the most important part about this is that bills are getting paid on time and the savings from not paying late fees is awesome.
Hi Lynette!
I love hearing how other people make their budgeting work! I absolutely love the second checking idea. This way it’s easy to pay but you know not to touch for any other reason!
I’ve been using this method for about 4 years now and it has totally changed my relationship with my finances! Since I rarely use cash and pay all my bills online, I do make 2 payments a month instead of waiting. However. I’ve found by making the 2 payments, if an emergency pops up between paychecks my debtors work with me because I’ve already made a partial payment. I’ve been able to get late fees waived or reversed if I have to make the 2nd payment after the due date. I suggest this to everyone I know when traditional budgeting seems to fail.
Great article! My husband and I had trouble coordinating until we did this. Now we have a joint bank account and each have our personal accounts and every paycheck, we deposit the same amount to the joint account and use it to pay bills. We used to pay the bills as they came but since I wanted them paid immediately and he’s more the type to wait for the due date, I ended up paying a majority and then having no spending money for himself. He was paying the rent on one paycheck and having nothing that two weeks, but the second paycheck only paid electric and I paid everything else. On rent week, he ended up needed me to supplement him because there wasn’t enough left over for gas, then next paycheck I was tighter, while he was buying whatever he felt like and I was getting resentful. Doing this saved our relationship because I no longer felt the pressure of “late” bills and now we each spend our money however we want. I manage our bills account so we have actually been paying bills as they are sent for over a year now and our individual credit ratings have improved drastically. If he makes a mistake and needs anything, there’s a bit extra budgeted into the account for that but over time, it’s become a routine so that’s happened less and less and now we have enough saved to pay a month ahead at all times. My goal is to have 6 months. Plus, I have a savings! He will never be the saving type and that used to drive me crazy but by doing this, he doesn’t have to be, because the required payment is removed first. It’s the best thing we ever did!
This is a nice and simple strategy to balance out the regular monthly expenses. Definitely looking at it from a different perspective makes it more achievable.
You can also expand this for annual payments as well. So if you have annual car registration, divvy it up by 12 (or 24 if sticking with the half month schedule).
I have done the the half payment method and it does work IF you stay on top of it! I’ve kind of strayed away from it but will be easing my way back to it as it does have a huge impact on having funds for each bill. I also use the cash envelope system for cash only transactions such as gas, groceries, entertainment etc. Thank you for this post!
You’re welcome! Thank you for stopping by!
Loved your article! This is also how I budget! I’m a SAHM mom and my husband is paid weekly so I divide it by 4. On 5 week months I still set aside the same amount, because at the end of the year that’s 4 extra “weeks” and I can make an extra payment that year to know things down sooner like the mortgage and car. I like using a small accordion folder vs envelopes though and label each section which bill it is.
It’s good in theory but not due able if you get paid once a month. Unless I missed something.
This post is for biweekly pay. Here is a link to a post about monthly pay. I hope it helps. https://itsasouthernlifeyall.com/budget-paid-monthly/
This is a new concept for me. Glad that I stumbled upon your site.
Appreciate the new to me idea. Thank you!
YAY!
Since my paycheck is automatically deposited, I have funds directly deposited into savings and checking. I have set up biweekly payments for my mortgage which tended to be the biggest payment that caused me to struggle to to next pay period. After reading your article, I will do more bills this way.
I’m so happy you found value in the post.
This method- and I think it is a good one, means being prepared to start saving 1/2 out of that second half of the first month, when that may have been your salad time. But it is worth it!
It is worth it!
I’ve used this method for years and have head good results. There are times I get off track and have to restart. But on the whole it works a lot better than pay check to pay check.
Thank you for sharing! I typically struggle with my bills each month and learning how to function when it seems like I have “extra spending money” from the lighter portion of my bills. I’m going to practice with my rent next month to see how I can do.
Thanks again!
To handle variables like utilities, I estimate the highest amount for each one and save half that amount. Over time, since I don’t use that full amount each month, I have saved a fund for the total amount of all monthly utilities, and I budget to replenish the amount I actually used.
Great tip! Thank you.
To handle the utilities in this method, there are two options. First, if you have lived in the same location for at least year, talk to your utility companies about level pay options (there are different names, budget billing is also one). The utility company averages your last year’s bills and that becomes your payment. For example, we recently switched our electric bill to level pay. May prior month bill was $175 but going forward it will be less than $70 per month. Some companies adjust month by month, others generate a new average annually. When you leave the address, you will “settle” at your final bill.
You can also calculate the average yourself and either pay the utility company that much each month (ensuring it covers at least the minimum) or “pay” that amount into your savings. Our sewer and trash bill is due every three months but we budget for 1/3 of it each month and have it earmarked for that purpose. The hit to our monthly budget is always the same and then the funds are available when it is time to pay the bill.
AWESOME tips! Thank you for sharing!