I mention in a previous post that I budget by paycheck. I started doing this around 2005, after creating a monthly budget for a while and not feeling like I had a good handle on it (because I was busting my budget). I was getting paid twice a month and I realized I had a better handle on my money when broke up my bills by what's due between the 1st and the 15th and what's due between the 16th and the end of the month.
Budgeting my money by paycheck was really effective and it showed me how much money I had left over after I saved and paid my bills each pay period. If you are renting and you think you are going to spend your money before it's due then you should speak to your landlord/property manager about making bi-weekly or weekly payments. You can also set up a separate account for your bills so you are not swiping from the same account you are saving your bill payments.
You can still do a paycheck budget if you are paid every two weeks or weekly. I actually get paid every two weeks now and have kept the original date cut off.
I should also mention that you don't have to break up your payment by when they are due using the payment dates. I set up my client’s paycheck budget by splitting her monthly expenses in half. It was easier for her to know a flat amount she needed to put toward her bills each pay period. So let's say her monthly expenses are $1800. I set it up where she knew she had to pay $900 toward her bills each paycheck. Using a flat amount made her realize she had more money left over each month, which also made it clear to her that she was overspending because.
If you are paid weekly, you can split your paycheck budget up by a flat rate or by due date. To do the latter, I would start by writing out when your bills are due during the month and then line up your pay days with bills due the week after you get paid.
For the larger bills, like your rent/mortgage, car payment, student loan payment, etc. divide the payment in half or by four (if paid weekly) and to pay that expense each time you get paid (or save it and make one payment). All it took was two rent payments and I decided that I didn't like having less money at the beginning of the month. So I split my rent payment in half. At that time my rent was $490 (the good days). So every paycheck I allocated $257.50 toward my rent. I also did the same thing with my car payment. It stabilized my cash flow and as a single mother, I needed my money to be as stable as possible.
I used the same process when I purchased my home but instead of putting half of my payment in savings, I actually set up a plan with my mortgage company to pay my mortgage biweekly. Making biweekly payments on your mortgage reduces the amount of interest you pay over time and the amount of time it takes to pay off your home (just make sure your mortgage does not penalize you for prepayments and that they will apply the payment when received).
Depending on how you pay your bills, you may be able to get to the point where you are paying your bills at least two weeks before the due date (this is what you want). Especially if you are paid weekly or biweekly where there are months where you have 5 or 3 paydays.
If you are having a hard time creating a monthly budget. Try budgeting by paycheck. It has truly made my budgeting process easier and now it is easier for me to reconcile when I get off track.
If you try out budgeting by paycheck let me know how you like it.
