How to Budget When You Get Paid Once a Month
Posted By Macey Farnsworth on September 19th, 2019
Americans are in a bit of a crisis when it comes to budgeting. With debt mounting from things like student loans and credit cards, coupled with nationwide rent averages that are on the rise, it's easy to see why budgeting is so tricky.
Budgeting can be significantly more challenging if you are only paid once a month. It’s easier to stay on a budget if you can account for cash flow from week to week. If you’re only paid once per month, it’s much easier for your budget to get away from you.
If you’d like to learn how to budget when you get paid once a month, you’re in luck. Below, we’ve compiled a complete guide on how to do just that. After reading this article, you should find it much easier to allocate your funds and meet your financial goals.
Pay Your Bills Together
The first thing that you can do when learning how to budget when you get paid once a month is to set up your billing statements to come out when you’re paid. For instance, if you’re paid on the 30th of the month, you can set up your billing cycles to end that day as well. Consider all of your bills when doing this, including:
- Credit cards
- Loan payments
- Cable and internet
- Utilities and electricity
- Cell phone
We recommend setting up auto-withdrawals for these bills. You can set the withdrawal to take place on the same day that you’re paid. Doing so will help you make sure that you pay your bills on time, avoiding interest and debt. It will also allow you to track your cash flow much more easily.
Note that some of these bills, like those for utilities, can fluctuate from month to month. Make sure that you have enough cash on hand in your bank to account for these fluctuations.
Pay with Cash
After paying your bills, you'll know precisely how much you'll have leftover to spend for the remainder of the month. We recommend switching to a cash-only system for the rest of these expenses. After you pay your bills, head to the bank, and withdraw the remaining amount from your paycheck in cash. If you commit to this system, you won't have the ability to use a credit or debit card to pay for purchases.
This ensures that you're only spending money that you have and that you don't go over-budget. It also helps ensure that you only spend money on things that you need. For instance, if you have $80 cash leftover on the last Saturday of the month, you may be tempted to go out to dinner. But doing so would prevent you from buying groceries the next day.
Paying with cash is an excellent tool for those who hate tracking their spending. Tracking spending can be challenging when you’re only paid once per month. This method accounts for those challenges.
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Build Your Rainy-Day Fund
If an emergency came up, how would you pay for it? Would you put it on credit, which would put you further into debt? If so, you’re not alone. Information from the Associated Press-NORC Center for Public Affairs Research found that two-thirds of Americans would have difficulty compiling $1,000 in case of emergency.
Credit cards should not be a crutch for emergencies. Instead, you should work to build a rainy-day fund. Your rainy-day fund is money that you’ve set aside to help you pay for unexpected purchases. Saving a little bit of money each week could go a long way toward helping you in these situations. That way, if an emergency comes up, you can pay for it without wrecking your monthly budget.
When building your budget for the month, you should prioritize saving for a rainy-day fund. Putting as little as $50 per month aside would leave you with $600 at the end of the year. That equates to about $10 per week. We’re willing to bet that you can find $10 in your budget that you can re-allocate toward savings.
Categories can help you better track your spending limits and habits each month. When doing so, you should try to set spending limits for the week, which will give you a more in-depth look at your finances. If you set limits for the month, it's easy to get lost in the big picture.
For instance, if you get paid once per month, you may determine that you need to set a limit of $400 per month on groceries. When you go shopping the first week or two, you’re tempted to spend more because you have the cash on hand to do so. However, this will put you in a crunch at the end of the month.
If you break your monthly budget down into weekly expenses, you’ll find it much easier to save. In this example, you’d limit yourself to $100 per week at the grocery store.
Sticking to a budget is challenging enough, but it’s significantly more difficult if you’re only paid once per month. The four tips that we provided will help teach how to budget when you get paid once a month.
We recommend implementing the changes gradually over time. If you utilize all of the changes at once, there's less likelihood that they'll stick. By applying the changes slowly, there's a better chance of them becoming sustainable habits.
There’s no better time than the present to get started. Create your first budget today and begin working toward the financial freedom and flexibility for which you’ve been longing.