How the Budget By Paycheck Method Works When Retired

We’ve all heard of living paycheck to paycheck…but what about budgeting from paycheck to paycheck? Budget by Paycheck may not be talked about as often as some of the more popular budgeting plans, but it might be the perfect method for you.

Good Debt vs Bad Debt

No matter your income, a budget is an important tool that will reduce stress in your day-to-day living and help you reach financial goals. When money is tight, budgeting is a way to keep your spending under control and eliminate debt by living within your means.

Good Debt vs Bad Debt

The Budget by Paycheck method is a budget that is created based on your take home amount each paycheck.

What is the Budget by Paycheck Method?

It allows for closer monitoring: A monthly or yearly budget can be more difficult to track. A paycheck budget has you regularly checking in on your income and outgoing expenses.

Close Monitoring

Using the 50/30/20 budget you will designate 50% of your take-home pay for necessities like house payments, groceries and utilities, 30% for wants and 20% for savings and/or debt repayment.

50/30/20 Budget

In the envelope system of budgeting, your take-home pay is cashed out, and placed into different envelopes each assigned to a different budget category. You can only spend the money in each envelope during your time period, so once the money is out for a particular category, spending is done!

Envelope System

This budgeting method works in the reverse of most other systems. With Pay Yourself First budgeting, 20 percent of your take-home pay FIRST goes towards your savings.

Pay Yourself First (80/20 Budget)


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