Using The Half Payment Budget Method Paycheck To Paycheck

What if we could live paycheck to paycheck on purpose and create a life of financial freedom?  Many feel the negative connotation of living paycheck to paycheck as a bad thing when it could benefit us.

There are fantastic advantages of budgeting paycheck to paycheck on purpose. We live paycheck to paycheck on purpose.  We create a budget for everything we want and need to pay for within the month.  However, each paycheck has its very own budget.  We assign each payment within the month to the paycheck that coincides with as we get paid every other month.  It is also known as the half payment budgeting method, too.

What Is A Zero-Based Budget?

I am sure you have heard this before.  A budget is just a plan for your money. It is a way to be aware and present how you handle your money, an economic blueprint.  A way to control how much you save, how much you spend, and where to designate the rest.

I love budgets!  I love being organized and knowing where my money is going.  I like knowing these things, and the advantages of budgeting are great for me.  It keeps me calm and sane.  I may or may not be a control freak.  And knowing I am in control of our money makes me a little less stressed.

Having a plan for your money must work for you.  Whether it’s on paper in a budget binder, in an app, or on a spreadsheet, it needs to fit in your life.

Three-quarters of Americans are one disaster away from financial tragedy.

Essentially, a zero-based budget is a budget that has no money left when you finish deciding where it goes.  Giving every dollar a place in the budget enables complete control over your cash.

For example, If your budget is an entire month out and you have $180 leftover, you cannot just let it sit there without a name. Even if you name that $180 miscellaneous or cushion, it has a name and a purpose. It will disappear if it doesn’t have a name and purpose.

A zero-based budget is your end game. The goal you aim for in any budget gives you the power over your money and spending.

Once you have a budget, you will see where your money is going and where it shouldn’t be going.  It allows you to make tweaks and changes where they need to be.  You may even feel like you got a raise!!

Who Needs A Money Plan?

Ummm…just about everyone!

If you have bills and responsibilities, you need a budget. If you have goals and dreams, you also need a budget.

If you do not have a budget, I’m sure it isn’t because you don’t know-how. I am sure it’s emotional, and everyone has an excuse for not having one. There are so many places to learn HOW to make a budget. It’s time-consuming and restrictive.  It’s too depressing to see all this money disappear and really, it’s just not fun.

Getting through the emotional aspect is a great first step and probably the biggest obstacle.  You really need to be in the right money mindset in order to start the budget process.

Advantages Of Knowing Where Your Money Is Going

Here are some great reasons to have a budget!

1. We see where you need to cut expenses and find ways to do that.
2. Control over your money to become debt-free.
3. You are planning for your future.
4. You are saving money for a beach house or any other big dreams.
5. Less money stress and fights.
6. Permission to have some fun without guilt.
7. You are feeling like you got a raise with all the money you have found going to waste.

The Problem With Traditional Monthly Budgeting

It’s too much time to predict.  There are four weeks (sometimes five) to accommodate here.  Yes, if we got paid once per month, we could plan for all of our expenses for the entire month.  But why not break it down and plan for the times when you do have your money.

Having all your sinking funds fully funded is excellent, but something always comes up. You do not have all of your money at the start of the month, and you really can’t know what is going to happen during that month. I find it so much easier to manage than an entire month.

Looking at the entire month can be intimidating and overwhelming taking a toll on emotions.  A budget is supposed to relieve stress not add to it.  Taking smaller bites can allow you to be that much more in control.

Living Paycheck To Paycheck On Purpose

Most see living paycheck to paycheck as a negative thing, and it is stereotypical.  I propose trying it all little different.  Live paycheck to paycheck on purpose.  Design your financial life around the way you get paid.

We get paid every other week, so we budget biweekly.

Because we like to focus on both short term and long term goals, budgeting bi-weekly allows us to look at our short term financial goals in these smaller chunks of time without getting overwhelmed and giving us control over our money.

What does it mean to live from paycheck to paycheck?

It means that there is no cushion for errors or emergencies. There is no money left in their account when the next paycheck has cont.  It has all been spent.

According to Forbes, Career Builder showed some pretty upsetting statistics from their survey in 2017.

• Nearly one in 10 workers making $100,000+ live paycheck to paycheck
• More than 1 in 4 workers do not set aside any savings each month
• Nearly 3 in 4 workers say they are in debt – and more than half think they always will be
• More than half of minimum wage workers say they have to work more than one job to make ends meet
• 28% of workers making $50,000-$99,999 usually or continuously live paycheck to paycheck
• 70% are in debt
• 32% of the nearly 3,500 full-time workers surveyed use a budget and only 56% save $100 or less a month.

However, this is NOT what living paycheck to paycheck means to us!

Is This The Same As The Half Payment Budget Method?

We live paycheck to paycheck on purpose because this is what works best for us.  I can add to my sinking funds, see what needs to be paid each pay period or biweekly and plan accordingly for things that might come up within those two weeks!

Essentially, we take half of our expenses and set them aside for the month.  You could pay half your costs at the beginning of the month and the other half at the end.

So, instead of a monthly budget, we have a biweekly budget or half payment budget method.  And the best tools for this are a calendar, a pen, and a stack of bills.

How Do We Budget Bi-Weekly?

Grab all those bills or open up the apps to find out the due dates of your bills and find out the average amount due each month.  Sometimes they are fixed amounts where the payment is the same each month.  Consider your mortgage or cable bills.  They are always $1200 and $125 every month.

Other bills, like electric, might be variable month to month so finding an average of that bill for the year may take a little extra time.

Also, many times if you find too many bills due at the beginning of the month, sometimes utility companies will change your due dates with just a quick phone call.  This will allow you a little more balance in your budget.

Let me show you an example calendar.

For April, We have these bills:

• Mortgage: $1200
• Cable/Internet:$125
• Cell Phone: $75
• Car Insurance: $100
• Electric: $120
• Netflix: $10
• Student Loan: $375

Our take-home income is $4400 per month or $2200 each paycheck.

Looking at the calendar, you can see the dates when each of our bills is due.  Assigning each of these to a paycheck, we come out with a list of bills set to each paycheck as follows:

Paycheck #1 totals $895 which means there is $1110 left for debt payoff, sinking funds, groceries, and possibly investing. Paycheck $2 has a little less left over to do the same. I would consider paying off that student loan before investing.

Where To Keep Track Of Your Bi-Weekly Budget?

My favorite place to keep my budget is in my budget binder.  I love this thing.  If there was an emergency and we had to leave the house, I would grab this binder right along with the baby photo albums and wedding photo album.  That is how much it means to me.

There are some who prefer to budget using spreadsheets or computer-based systems.  These are great when you’re already on the computer anyway.

Many would instead use an app or computer program which is just as effective.  You can use the calendar on your phone in conjunction with Every Dollar or Mint (or any other app that you enjoy).

Have you thought about living paycheck to paycheck on purpose?  How do you budget?  Is there another way besides biweekly or monthly that you have come up with to take control of your money?