Ever get paid on Friday and wonder by Monday how you’re going to make it to the next payday? Start by planning the paycheck you have in front of you. Write down what’s available, what has to be paid before you get paid again, and what you need to set aside for bigger bills coming later.
1. Find out how much you can actually spend
Start with the take-home pay that landed in your account. Add any cash already available for this pay period and subtract pending payments if they aren’t already reflected in your available balance. Leave money you’ve set aside for another bill in its own category. If your hours or income vary, build this paycheck’s plan using money you’ve received. You can update the plan when the next deposit arrives.
2. Put paydays and bills on the same calendar
Write down your next payday and list everything that comes due before then, including automatic payments. Give essentials like housing, utilities, groceries, and transportation to work first claim on your money. Include minimum debt payments in the plan. Then look one paycheck ahead. If rent is due the day after you get paid and that check won’t cover rent plus groceries, set aside part of this check now.
3. Give every dollar a job
Say you brought home $1,400 and have no other money available for this pay period. Here’s one way you could split that check.
Set aside for next month’s rent — $650
Groceries until payday — $220
Gas to get to work — $90
Utilities due before payday — $160
Minimum debt payments — $180
Starter emergency savings — $75
Checking cushion — $25
Total assigned — $1,400
The $650 stays in your account until rent is due. It already has a job. So does the $25 cushion. Assigning every dollar means you know which money is available for groceries and which money is spoken for.
4. If the paycheck falls short, find out why
If there’s enough money over the month but bills bunch up in one week, you have a timing problem. Ask a provider whether you can move a due date closer to payday, and confirm when the change takes effect. You can also split a large bill between two checks by setting money aside from the earlier one.
If the essentials cost more than you bring in for the whole month, write down the gap. Pause or trim optional spending where you can. If you’re still short, call the companies you owe before missing payments and ask what options they offer. Knowing whether you’re short $40 or $400 gives you a better place to start.
Take ten minutes on payday
Open your bank app, check what’s due, and give this check a plan. Check it again halfway to the next payday so you can adjust while you still have money to move. If you’d like a place to write it all down, grab my free budgeting tool on the Death to Debt homepage.
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Consumer Financial Protection Bureau cash flow budget worksheet
