How To Budget When Paychecks Differ

As we approach the end of the year (at a ridiculously fast rate) a lot of you might be thinking about what you want to do different in the new year. Whether your resolutions are big or small, I think we all have a goal to be financially savvy and more aware of our spending habits. There’s a lot of money advice out there from experts and an expert I. AM. NOT. 

I won’t preach to you how to handle your money, or where to invest. But I thought that I’d share how I organize our month to month bill paying. What makes our situation unique is neither my husband or I make a salary. So paychecks are hard to predict and often vary greatly in amounts. It can be a scary way to live. Especially if you don’t have an organized system, so I’m sharing this in hopes that if you happen to be in the same boat and don’t think you can budget because of said boat…just know that you can, it might be a little more work, but it’s doable and has gotten us through some “should have been tough, but weren’t so bad months“…here’s how I handle it…


Hopefully you file your bills away every month for the year. If you don’t then make it a goal to do that starting January 1st. If you don’t physically have your last years worth of bills on hand to look back on then you can always go through your bank to get your statements and back track to find how much was paid to who.


Whenever I pay a bill (usually done online) I print out that proof of payment and staple it to the statement and file it away. I use 6 red folders, 2 months to each folder. It’s easy for me to find things this way just in case I need to pull it out during the year.

At the end of the year (now) I pull out everything from my folders and separate them into like piles. All the electricity in one pile, all the water into another…etc…


 Here’s where the budgeting and guesstimating for next years bills come into play…

Open up your spread sheet application on your computer. You might have Excel if you’re on Windows, I use a Mac so I use something called Numbers.



You could totally do this by hand too by the way! Just make columns with January-Decmeber and rows going across with the names of bills.

 Here’s what my spreadsheet looks like…



So now, pick up one of your piles…for example purposes lets just say it’s the water bill pile. Start putting in the amounts you owed throughout the year for each month. 


Continue to fill in all the rows for each bill. You will probably begin to see some sort of pattern develop. You will have better months than others, but don’t look at it as you have more money to spend those months. Use the better months when money isn’t so tight to “overfund” your bill account.

Here’s what I mean by “overfunding”…

If you scroll up and look at the water portion of my spreadsheet you’ll see the different amounts owed. I’ll list them here for you as well…

billamounts I add all the amounts together, then divide by 12, then divide by 2. This gives me the amount to deduct from each paycheck for this bill. I do the same for all of the bills.

So example: Water bills (above) = $943.27 yearly operating costs (divide by 12 months) =$78.61 average monthly cost (divide by 2 because we get paid biweekly) = $39.30 or just round up to $39.50 to make it easier.


Once you’ve done this for every bill, add the totals in your per paycheck column together. It will give you the lump sum of the total cost amount for all of your bills owed per paycheck.


Once I have that total…That is what I now will write out a check for every paycheck to deposit money from our checking account to our “designated bill checking account.” That account is only used to pay our monthly bills, and nothing else. 

Whatever money is left over from the paycheck is split up between savings accounts, emergency fund, grocery budget, and the honey pot account (which is what we call our fun money), and we are always left with a $0.00 balance. Every single penny should have a designated purpose.

UPDATED 1/3/14: So a few people have emailed me some great questions about how to start this or to clarify some things…

#1. “How do you get started? Due dates are going to mess me up…” You’re right! If you are currently living paycheck to paycheck with no wiggle room to spare then the only thing I can suggest is how I started doing it this way and that was to wait until you get your tax return to put in an extra months worth of bills…this way you will be a month ahead give or take a few dollars every once in a while. You are definitely going to need at least a small cushion to get started so you don’t fall behind.

#2. “Are you always a month ahead when you place the corresponding amount away? For example, the money you put away from the January paycheck pays the February bills?” Yes, for the most part we are always about a month ahead. Sometimes in those “harder- more expensive months” we have to tap into the extra money that’s there, but it’s always from that designated bill checking account. This is why it’s so important to overfund your bill account in the better months so the money is there and you won’t need to tap into one of your other accounts for the money or come up short when it’s time to pay a certain bill.

#3. This wasn’t a question asked, but an additional tip I have for you that I thought you might find useful. When I set up that designated bill checking account I also set up direct bill pay for specific dates. I pay 1/2 of our bills at the beginning of the month and 1/2 towards the end of the month. Most of the companies we use give us money back or discounts for using automatic bill pay. I added it up and our savings is almost $150/month just from that. So I highly encourage you to at the very least set up direct bill pay for your bills from a designated bill checking account.

It’s not a set in stone guarantee that paychecks and bills will be exactly the same next year as they were this year, but I at least feel more in control of our finances by doing it this way. Unexpected expenses happen. But by organizing our month to month expenses and bills this way, I have found it easier to fund our savings and emergency fund for when the proverbial crap hits the fan.

I hope you’ve found this post helpful. I’d really love to hear any of your tips on how you organize paying your bills month to month!

As always, I’d love for you to stick around, so follow me on Facebook while you’re here.

Talk to you soon friends, take care!


Linking up to: Tatertots and Jello




  1. Misty says

    This makea a lot of sense but I have a somewhat different situation in that we are completely commissions so not onmy do they vary each time but it also varies when we get paid too. At the moment I’m just keeping tabs monthly on a spreadsheet and trying to budget that way, but it sure makes it hard to prepare for the whole year.

  2. Brandi says

    Thank you for this! My hubs and I are in the same boat. He works construction, which is weather-dependent. During winter months, it can get really tough. I have been trying different methods of budgeting for us and we always seem to have a hard time making anything stick because his paychecks can vary so much. Some weeks there may not BE a paycheck if the weather is really rough! So thank you for this post. It gives me a lot of hope, because I felt like other people who did financial posts really didn’t understand what it meant to be unsure of your income.

  3. Berenice says

    Hello, it sounds like a great plan, but are you always a month ahead when you place the corresponding amount away? For example, the money you put away from the January paycheck pays the February bills? Thanks!

  4. Sara G. says

    Any suggestions on determining the amount to hold for each pay week when I am salary every 2 weeks, and hubby is irregular every week? I know you divide by 12 then by 2, should we also do the same…this math is making my head hurt, and always discourages me.

    • Christine says

      Don’t get discouraged Sara! Yes…I would do it the same way, and you have the added bonus of that salary check so you already know that amount.

  5. says

    Build a price range – and stick to it. Make a note of your spending habits over the course of a month. Track where every single penny goes so you can figure out where you need to have to cut back. As soon as your budget is set for the month, if you come across you commit significantly less than planned, use the extra money to spend down your debt.

  6. Lacey says

    Hey I just had a quick question. I know most months have two paychecks, but because there are 52 weeks in a year (26 paydays), two months of each year have three paydays. What do you do with those extra paychecks?

    • Christine says

      Such a great question! I usually put the extra towards paying off our mortgage principal :) But you could use it to bulk up your savings, or splurge a little :)

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