How to Use the Budget by Paycheck Method

bill calendar budgeting money plan

In this blog, I’m going to you how to Budget by Paycheck.  With this method, the basic budgeting process is that you decide which bills you're going to pay with which paycheck.  Sounds pretty easy, right?


Planning one paycheck’s worth of money is wayyyyy simpler than trying to budget a whole month at a time.  


The Budget by Paycheck Method is PERFECT for YOU if:


  • you aren’t a numbers/math type person
  • you’re new to budgeting
  • Budgeting hasn’t worked for you in the past
  • you get really overwhelmed by the whole process


Darlin’, I getchu and I gotchu.




Simplify: Budget by Paycheck

When it comes to any big project, breaking the big chunks into little chunks makes the whole project easier to think about, manage and plan. 

In this case, a big chunk would be trying to budget an entire month.  But with the Budget by Paycheck budget process, we break down that big chunk of an entire month into smaller chunks of just one paycheck’s worth of money.  

One paycheck is just 7- 14 days worth of money.  That's just the next two weeks!  Easy peasy!

That small chunk is much easier to manage than trying to budget for an entire month, or, even worse, a year at a time!


Three Simple Steps to Budget by Paycheck

Using the Budget by Paycheck Method allows you to break your money up into manageable pieces of just one paycheck and then plan which expenses you’re going to pay with each paycheck.  Planning which expenses you’re going to pay with each paycheck is the super critical part! 


Here are the steps, and then I’m going to go into each one of them in detail below:

  1. Step One: Separate your bills and expenses into “Musts”, “Wants”, and “Everything else”
  2. Step Two: Put Everything on a Bill Calendar
  3. Step Three: Automate, automate, automate!

John F. Kennedy once said 

“The time to repair the roof is when the sun is shining”


Planning your paycheck, deciding what bill or what expenses you’re going to pay with which paycheck during the month is fixing the roof while the sun is shining.  


Step 1 Separate bills into “Musts”, “Wants”, “Everything Else”

When I work with my coaching clients we start by categorizing all of their expenses into three big baskets of expenses.  Their Musts, their Wants, and then Everything Else:


  • Your Musts are the bills you have to pay for to keep your train on it’s tracks 🚃 .  So rent, car payment, daycare/elder care, insurances.  Think about the bills that you would HAVE to pay if you were to lose your job.  Those are your true MUSTS.
  • Your Wants are the bills for the things that make your life enjoyable 💃.  Think of this one like this: if you lost your job tomorrow, what would you immediately turn off, postpone, or decrease what you’re paying. That’s a Want.
  • Your Everything Else is anything that isn’t a bill, but that you need to or are going to spend money on.  So, groceries, gas, fun money to eat out, this week's mani/pedi, etc. ✨

Being Honest with Yourself About Your Money is Key

But, the really important part here, and the part everyone struggles with when it comes to budgeting, is actually being honest with themselves about how much they are going to spend and what they are going to spend it on.  

If the Budget by Paycheck Method or any other budgeting method is going to work for you, you have to be honest with yourself about what you’re going to spend.  

Sorry if that sounds harsh.





A Budget Only Works if you Put Everything in It

You know what you’re going to plan for it.  It’s your plan, you get to say!

But, at the same time,..........don’t get yourself all twisted up about it.  

You’re aiming for a B+ paper here.  So, if you get 85-89% of everything, you’re good. Especially when it comes to the Everything Else category.  Don’t overthink it.  Go through your expenses for the past two months and estimate what you spend on gas, groceries, Costco, Target, restaurants, mani/pedis, etc.  Then divide that amount by two and that’s pretty much your everything else for one month.  Then divide that number by four and that’s your per week amount. 

Let’s talk about Wants

When it comes to the word “Want” in this method, don’t think of Want as purely “luxury”.  A Want could be the extra money you're throwing at credit cards or mortgages because you WANT to get them paid off faster!  The same goes for your credit cards or school loans.  If you WANT to get rid of that debt, then each month you’re going to make a payment towards the principal so you get out of debt faster and pay the least amount of interest. 

However, to go back to my earlier example, if you lost your job, you’d probably go back to paying just the minimum to conserve cash, and then that expense would become a Must.  So, your Musts and Wants can be flexible, depending on your circumstances during that paycheck period.

But, don’t overthink it. Just pick a basket and go with it. It’s more important to account for it than obsess over which basket it belongs in.


Step 2 Put Everything on a Bill Calendar 

If I had a nickel for every time I’ve said “My calendar is my life.  I’d be lost without it!”  I would be a rich woman!  

Because it’s true. I would not know where I’m supposed to be or what I’m supposed to be doing:  including what bill to pay on what day.  Or, if they’re automated, what day that payment happens.  (See Step 3 for more on that)


That is why I looooooove my calendar.  It’s my BFF.  


That’s why Step 2 of how to use the Budget by Paycheck Method is to put everything on a Bill Calendar.  This way, you can SEE what’s coming up this week. No more surprises. No more missed or late payments.  


Schedule Your Paychecks and Your Expenses 

Here’s how to set up your Budget using the Paycheck Method.  You can use a paper calendar or the calendar on your phone, tablet, or computer.  Whatever is most comfortable for you.  If you are using paper for this first run-through, use a pencil because we’re going to move things around in a minute.


  • First, put “Payday” on every day you’re going to get paid. I like to include my net pay  
  • Second, add all of your “Musts” on the days they are due and include the amount of the bill
  • Third, add all of your “Wants” on the days they are due and include the amount of the bill
  • Fourth, add average amounts for your “Everything Else” expenses.  Pick days you usually shop/buy those things. So, if you go to Target every Saturday and buy groceries every Wednesday, put averages of those amounts on those days.


Now, take a deep breath.  We’re almost there.


  • Do you have any weeks where several big bills are due?
  • Did you know you can often change the due date of your bills? You can!
  • Call the companies for the bills that are causing you these cash crunches and see if you can change the due date.
  • Changing the due dates of your bills will allow you to redistribute your bills throughout the month and pay them with a different paycheck
  • Do this for all your bills until you know exactly which bill you’re paying with which paycheck!  


Distributing your bills according to when you get paid allows you to smooth out those cash crunches and bumps.  Eliminating those cash bumps means you won’t have those lean days between pay periods.


I did a blog about how to create a free Bill Calendar with Google calendars including a free tutorial: Read it HERE


In this free tutorial, I show you how to create your Musts/Wants/Everything Else as “appointments” on your calendar so you never forget about a bill or make a late payment again.  This is especially helpful for those pesky quarterly and annual bills like car insurance and property taxes.


Money is a lot like time, you get a finite amount to “spend” each week.  Putting your bills/expenses on a calendar lets you see where you’re spending your money and makes sure you never get surprised again!


Step 3 - Automate, Automate, Automate!  

One of my favorite quotes by the legendary organization and productivity guru David Allen is: “Your mind is for having ideas, not holding them.”  


The same can be said of your bills.  


You want to know when I used to remember to pay my credit card - the day it was due!  By that time the payment was already going to be late.  No bueno. 


That’s why Step 3 in the Budget by Paycheck Method is to automate your payments so you don’t have to remember to pay them.  


But, don’t just automate them.  Really look at when your bills are due each month in relation to where you get paid.  Distributing where you will pay your bills in relation to when you get paid and also considering where other bills also fall is the real key here.  


Automating the bills makes sure you get them paid.  But, like we discussed in step 2, deciding which bill to pay with which paycheck is where the real beauty of this system plays out.


Don’t forget about Saving!

The number one reason to actually to save.  That’s really why we all budget.  To Save.  And that old saying of “Pay yourself FIRST” is an old saying because it’s absolutely the truth. 

Don’t forget that planning your paycheck includes what you're saving each month into your three main savings accounts!  Be sure to include the amounts you’re going to deposit into your “Rainy Day” Fund, (because, darlin’, it ALWAYS Rains!), Your Vacation Fund and your Because it Pleases Me fund.

Paying yourself first is the real freedom.  Paying yourself first means you are taking care of yourself today and tomorrow.  

Check out this blog for the Three Savings Accounts Every Girls NEEDS


Finally, Remember New Habits Take Time

The Budget by Paycheck method is an easy budget process to understand, but any habit or process can take some time to completely get comfortable with.  

So, if you’re feeling anxious just take small steps.  Maybe start by choosing one bill that causes you a cash crunch each month and calling and trying to have the current date moved that’s easier on your cash.  

Don’t forget to DM me over on Instagram and let me know how you’re doing!  








**I am not a licensed financial advisor.  I am a money expert and I offer education, tips, tricks and my opinions around money.  You should consult a professional who understands your needs in order to make the best decisions for you!  Additionally, some links in this blog may be affiliate links, which means if you click the link and buy the product I may earn a small commission - at NO COST to You! It’s one of the ways I keep the lights on around here so TYIA! 😉

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