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.money printables

We live paycheck to paycheck on purpose.  We create a budget for all the things 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 it coincides with as we get paid every other month.  It is also known as the half payment budgeting method, too.  There are fantastic advantages of budgeting paycheck to paycheck on purpose.

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 in the way your money is handled; a monetary blueprint.  A way to give you control of how much you save, how much you spend and where to designate the rest to go.

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 are finished deciding where it goes.  Giving every dollar a place in the budget enables complete control over your money.

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

A zero-based budget is your end game. It is the goal you are aiming for in any type of budget giving you the power over your money and spending.

Once you have a budget, you will be able to 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!!

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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 am sure it isn’t because you don’t know how.  There are so many places to learn HOW to make a budget.  I am sure it’s emotional.  Everyone has an excuse for not having one.  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.

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Advantages Of Knowing Where Your Money Is Going

Here are some great reasons to have a budget!

  1. Seeing where you need to cut expenses and finding 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.

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.  Having all your sinking funds fully funded is a great thing, but something always comes up.  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 and a negative thing, and it is in the stereotypical sense.  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.  By the time the next paycheck has come, there is no money left in their account.  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 always 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!

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