I would like some advice on how folks handle: one income that is bi-weekly & one income that is 1st and 15th. I am bi-weekly and my wife is last day of the month and 15th. I'm finding it challenging to manage everything with a paycheck coming in every week basically.

If anyone has some experience, tips, advice I would greatly appreciate it.

Thanks!

I have three Google sheets tabs in a workbook.

In the first, I project my personal cash flows for the next two years. Today's date in Column A, +7 days about 5-10 lines down, etc. and then in Column B, my cash balance at that date, which is adjusted up or down by amounts in Column C (for instance, taxes are due 4/15). Then I describe that amount in Column D. Each week I update my sheet. Boom. Done.

In tab 2, I do the same thing for my business.

In tab 3, I track my net worth. All my assets and liabilities by month going back years. This has been instrumental to me, and I encourage other people to do this also. (Gary Keller describes doing this weekly in one of his books.)

Can you elaborate? What are you having trouble with specifically?

I get paid once per month, with several 5 week months thrown in for extra excitement. That can be challenging for people with cash flow struggles. But why is getting paid each week challenging?

Really just figuring out what bills to pay out of each check. Before the changes in pay dates I was settled into a routine every two weeks and knew exactly what needed to be paid and when.

To the extent that I can (without making a late payment), I try to pay all my bills at the same time around the end of the month. I use the online bill pay service through my bank to help me with this. Any time I can, I set up recurring payments so I don't even have to think about paying those bills.

For example, I will make my mortgage payment for Oct on one of the last days of Sept, and that typically coincides with my second paycheck for the month (I'm paid bimonthly). That's also right around the time I pay my other household bills (electricity, water, gas). Most of my other recurring bills come around that time, too.

I also started waiting to pay my credit card bill until right before it's due (which also happens to be the end of the month). I usually have an entire month between when I get my statement and when the payment is due without penalties or interest. I used to pay it as soon as it came in, but instead I now schedule the payment for right at the due date as soon as I get the statement. This is something you can also use the online bill pay service through your bank to help you with.

Basically, what I'm doing is letting my account "fill up" before paying any bills. As extra money builds up over time, I move it to one of my higher-interest accounts. I try not to keep any more than what I need to cover expenses in the main account that I pay bills from.

Also, anything that I can pay by credit card, I do. This isn't a lot of expenses, but it does cover my gym membership and my security system. I get the points, and then I have that one month grace period before the bill is due (not that I need it, but as long as the cc company doing things that way, I'll take advantage).

RG20 said:

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Really just figuring out what bills to pay out of each check. Before the changes in pay dates I was settled into a routine every two weeks and knew exactly what needed to be paid and when.

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I think you are way over thinking it. Is cash flow an issue?

If so, as everyone else is saying, get on a budget and build a buffer. Once that is done, then it won't matter when the funds arrive. I have everything possible Auto charge to my credit card, then just pay that once a month. Other than that, I have a couple of life insurance premiums, natural gas bill, mortgage, and car payments that are on Auto draft. I write zero checks each month.

Again, if cash flow is a problem where there are weeks you are broke, that may not work. Otherwise, just pay before the due date by whatever process you prefer.

What everybody above said. I will add that you might check if you can move the due date of the bill. I know most credit cards allow you to request a certain date and some other bills do too.

Another rec for building a buffer, and if you find that difficult on two incomes, take a hard look at where your money is going.

I keep my 6 month emergency fund in a high interest savings account with a credit union. I never touch that account (other than a modest piece of each paycheck that is autodeposited) and forget about it most of the time, I don't really even know how much is in it anymore, but the point is that that money is off limits unless there is a real emergency.

Everything else hits my main checking account with a major bank. I keep 2-3 months of bills in there, and if I'm saving for a major purchase that's where I do it. Each month I check the balance, pay my bills, and move whatever excess is left over into one of my investment Fidelity investment accounts.

It's not especially efficient but I don't have to worry. That's what all this is really about, right? For the last few years I've focused on maximizing income, avoiding dumb purchases, and keeping my living expenses roughly flat. The rest is working itself out.

I agree with others. It sounds like you need to decrease expenses a bit and build a buffer.

OP has not said he is having trouble affording his bills. I'm still waiting to hear if he actually has a cash flow problem, which is what everyone is assuming.

All he said is he's trying to figure out a new routine for paying which bills each week with this new schedule.

cjsag94 said:

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OP has not said he is having trouble affording his bills. I'm still waiting to hear if he actually has a cash flow problem, which is what everyone is assuming.

All he said is he's trying to figure out a new routine for paying which bills each week with this new schedule.

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It's hard to imagine a reason that matters that doesn't involve a cash flow issue. Now, maybe the issue is that he is moving too much to savings and simply keeping more in checking will be fine, but there is zero reason to care about when money is coming in unless there is a chance money going out could be problematic.

Hence my confusion to OPs question (and I think everyone is drawing that logical conclusion). He never said he was struggling with the funds to pay. He said he used to be in a nice groove, but now he's struggling with what his new routine should be.

Even when I asked, he didn't say cash flow was the problem . He just said trying to decide when to pay what bills. Maybe he'll drop in and clear up exactly what his challenges are.

Exactly, I m not having a problem with having enough money. My issue is with the timing of the income changing and when to pay bills...

I appreciate everyone's reply's and I actually lime the buffer in expenses, although I have about a $2,000 emergency fund, which I know is different.

RG20 said:

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Exactly, I m not having a problem with having enough money. My issue is with the timing of the income changing and when to pay bills...

I appreciate everyone's reply's and I actually lime the buffer in expenses, although I have about a $2,000 emergency fund, which I know is different.

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I guess what I don't understand is -

if there is no cashflow issue, then why don't you just pay the bills when they're due (or better yet, set up autodraft and let it pull automatically).

2 years ago, we were single income with me getting paid every other Friday.
Then my wife started doing some part-time work where she got paid every other Friday as well.
Then I changed jobs to where I got paid on the 15th & the last day of the month while she got paid every other Friday.
Then she changed to subbing at our kids school which pays on like the 25th of the month following the work (i.e. she'll get paid around October 25th for September sub jobs.

None of it changes anything about our approach to bills because there is a full buffer.

Based on what you've mentioned, it sounds like you probably should just keep more margin in your checking account. My recommendation would be to add up all of your bills for a month and make sure that much is in there (plus a few hundred or so) at the beginning of the month. Then, you'll have bills take some out, paychecks resupply, etc. but you don't really have to care because you have enough in there to cover all of the bills even if NOTHING comes in.

So, if your expenses are $2,000 a month (just using round numbers), make sure you have $2,500 in your account on October 1.

Then, at some point in October you will have paychecks coming in. It doesn't really matter when because you can cover ALL of your bills until then, even if they are all taken out on October 2nd.
In theory, if you stick to your plan, you'll have enough for November in the account on Nov 1 (basically, it will be October 1 balance minus expenses plus paychecks).

Set up everything to autodraft (you can still keep an eye on it, but man - I would not want to think about writing and sending checks) and your system will be on autopilot.

When you have big, unexpected expenses, bring over money from savings to cover them.

When you have nice windfalls, handle them however you want, making sure you keep enough in that account to handle the month.

Let us know if we're still missing anything in particular.

Are you and your wife using separate checking accounts? If that's the case, why not consolidate into one account, and then all bills are being paid from that one account. Then you no longer have to worry about which days you'd be getting paid for each particular account.

If you each want separate spending money, you could then setup separate checking accounts that have a monthly direct deposit from your main account. I don't get the want for this kind of setup, but understand it works for some couples.

We just have one main checking account...to me it's easier to have it all come into same place. I do like this idea though of giving her an account then transferring money to it out of the main account.

Yeah, the buffer seems like the logical way to go. I appreciate the replies.

Thank you!

HYC_AG said:

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Something that hasn't been mentioned that I would recommend and how I handled it when in the same situation.

Budget/live as if you will always only get two paychecks a month. Two months out of the year you will get an extra paycheck and be able to utilize it as a "bonus".

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This is what I've done in the past. At one point a number of years ago, I was getting paid every other week. I have a monthly budget that I've used for years, and I just essentially split all bills and money out into two segments (beginning of the month and middle of the month. And you know which bills get paid with which paycheck. And then as the above poster said, two times a year you will have a month where you get three paychecks. Consider it a bonus.

Currently I get paid twice a month, and I still do the same thing. I keep a spreadsheet of what gets done with the paycheck on the 1st and what gets done with the money on the 15th. Simple and easy.