How to Budget Your Money When Getting Paid on the 1st & the 15th

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Getting paid on the 1st and the 15th can make it difficult to properly budget your money. Get tips on budgeting your money when you get paid on the 1st and the 15th with help from a professional financial adviser in this free video clip.

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Video Transcript

This is Teresa Dentino CEO and founder of The Financial 411 in Woodside, California. We're going to talk about making a budget when you get paid on the first and fifteenth of the month. There are some really simple steps that you can take, and we're going to walk through them right now to show you how to do this. The first thing you want to do is make a schedule of all the bills and their due dates. Then, you want to divide those that occur in the first half of the month and separate those that occur in the second half of the month. Once you've divided them, total up what the amount comes to for the first half, and then total up what the amount comes to for the second half. The next thing you want to do is look at what is the actual net amount of your take home pay. Now you can take the amount of your take-home pay and compare it to one of the periods and compare it to one of the periods to see whether that covers the amount that you need or whether they come up short. You can then take the same amount and compare it to the other period and do the same exercise. Now remember, in addition to the regular bills that come, you'll also need to include in your expenses, for that period of time, things that you'll be spending cash on. For example, gas, groceries, and the like. Then, you have the real total of what your expenses will be for that period and it's always a good idea to estimate a little higher just because, as human beings, we tend to underestimate and that's when we get into trouble. Now that you have a really good idea of what your expenses will be for that half period of the month and you've compared it to what you get from your salary you can see, again, whether you are short or whether you have money left over. So we'll look at the period where you come up short and talk about how to have funds available during that period. Essentially, this means that you would have funds available from the other period where you have money left over. The money that you have left over in the other period is money that you really wouldn't put aside, especially if you tend to spend all the money that's in your checking account. What you need to do is set aside the surplus money, or the money that is over and above, what you need for your bills and put it in a separate savings account. In that way, the dollars will be there for you when you need them in the half month period where your paycheck just doesn't go quite far enough. Remember, the tricky part can be estimating what you'll actually need for all of your expenses during a certain period. As long as you're honest with yourself, you won't go wrong.

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