How to Budget When You Get Paid Monthly

Get paid monthly? Here are the key steps to budgeting your monthly pay periods!

In this article, I discuss how to budget by monthly pay periods, so you can feel confident about budgeting your paychecks. When you get paid monthly, you receive only one paycheck each month. While your pay schedule is predictable, you have to spread out your income throughout this long pay period. With an effective budget template and routine, you can easily budget your monthly pay period.

When you get paid monthly, you receive one paycheck a month. This pay schedule is probably the least common one used, and it’s more characteristic of salaried employees or self-employed workers. Typically, a monthly pay period benefits the employer more than the employee. Let’s take a quick look at the advantages and disadvantages of this pay cycle. Then, we will jump in to this value-packed post about how to budget when you get paid monthly.

Advantages of Getting Paid Monthly

Some benefits of getting paid monthly include:

Predictable pay days
Usually the same amount of pay each month (no extra paychecks that you have to worry about budgeting)
Fits the rhythm of monthly bills more closely

Disadvantages of Getting Paid Monthly

Some of the disadvantages of getting paid monthly include:

Much more distance between paychecks, so you really have to make sure to stretch out your income
Typically not best for hourly employees (more suitable for salaried employees or self-employed workers)
Holidays or weekends can change the pay date

How to Budget Monthly Pay Periods

Whether you choose to get paid from your own business monthly or you have no choice, but to receive monthly paychecks from your employer, let me teach you how to effectively budget your monthly paychecks. Using my pay period budgeting method, there are four steps to budgeting when you get paid monthly.

See the Monthly Budget Example below for an example on how these steps are implemented, and afterwards, read my extra tips on budgeting monthly!

1. List the pay period dates that take place next month.

Since you only have one pay period, list the dates of that one pay period. For instance, if you get paid on the 10th every month, you would list the pay period from the 10th of the current month through the 9th of the following month.

This pay period makes up your budget month. Typically, I suggest that the pay period that contains the first day of the month is the first (or only) pay period of that month. So, for April, if you get paid on the 10th, the monthly pay period would go from March 10 through April 9 (because April 1st falls within this pay period). However, with a monthly pay schedule, you may choose to pick the pay period that falls within a month the most to be the pay period of that month (In our example, April 10 through May 9 because most of April falls within this pay period).

Either way is fine; the important thing is to stay consistent with what you choose to make up your budget month.

2. Make a list of all of your budget categories or line items.

I recommend listing out all of your budget line items in every budget. This will allow you to see every bill or expense you might have during the pay period. My budget template makes this easy.

3. Make a zero-based budget for each pay period of the month.

You only have one pay period, so it will take less work; however, you must be more intentional. Allocate all of your income to different budget line items until you run out of income. Once your income equals your expenses (or income – expenses = 0), you have created a zero-based budget. Making a plan for every dollar you bring in will help you stay on track with your spending during this long pay period.

4. Set aside income to pay bills later in the budget month.

With a monthly pay schedule, you have one paycheck that has to last the whole month. Creating a pay period budget for the whole month allows you to determine where you might need to adjust your money flow. In addition to making a budget, writing out all the due dates on a calendar will help you visualize how to spread out your income throughout the month.

Monthly Budget Example

To help illustrate budgeting when you get paid monthly, we will use an example of a single teacher named Sarah who is paid $4,000 once a month on the 1st of the month. Let’s build her April budget:

Step 1

First, Sarah should write out the dates of the pay period that takes place next month:

March 31-April 30, 2023

Since April 1st falls on a Saturday this year, she receives her paycheck a day early on Friday. The first pay period starts at the end of March, but since April 1st falls within the pay period, it is the first pay period of the month using my system.

Step 2

Next, Sarah needs to write down all of her budget categories. A typical budget could have many more line items, but I will keep it simple and just list out 13 main budget categories that Dave Ramsey uses.

Giving
Saving
Food
Utilities
Housing
Transportation
Health
Insurance
Childcare
Lifestyle or Entertainment
Personal Spending
Miscellaneous
Debt

Step 3

Now, Sarah should make a zero-based budget for the whole month. Here is a monthly budget example:

Income

Total = $4,000

Expenses

Giving – $400
Saving –
Food – $400
Utilities – $200
Housing – $1,000
Transportation – $400
Health – $200
Insurance – $400
Childcare –
Lifestyle or Entertainment – $200
Personal Spending – $200
Miscellaneous – $200
Debt – $400

Total = $4,000

Step 4

After making her monthly budget for the month, Sarah needs to write out the due dates for her expenses on a calendar and devise a plan to spread her income out evenly throughout the month.

How to Budget When You Get Paid Monthly Tips

Here are a few extra tips to help you budget your monthly paychecks!

Adjust the due dates of your bills.

Some companies allow you to do this. With a monthly pay schedule, it may be beneficial to try to pay all your bills at once at the beginning of the month. That way, you can make sure you don’t run out of money later in the month to pay them. Then, you only have to worry about budgeting for everyday living expenses, like food and gas.

Open a bills bank account.

If you can’t avoid your bills being spread far apart, consider opening up a bank account just for bills. Transfer money to it when you get paid. Don’t connect a debit card to this account to make it more difficult to access the money. Then, set your bills on auto-pay, so they are always paid on time. I like using this method because you can usually budget this bank account to the exact dollar.

Use sinking funds.

Sinking funds are a budgeter’s best friend. They allow you to slowly save for big purchases, such as Christmas gifts, a vacation, your car registration, etc. If you are always coming up short on money to pay the bills, maybe you aren’t effectively budgeting for the bigger, more unexpected expenses.

Set aside a portion every week to pay off debt or save.

If you want to pay off debt, use Dave Ramsey’s budget percentages and determine a percentage of each paycheck to put towards debt. Let’s say you want to put 20% of your income towards debt, and you bring home $4,000 a month. You could put $800 towards your debt each month, or $9,600 a year! That’s the power of budgeting.

Practice.

If you practice budgeting every month, eventually, it will take you like two minutes to do. It won’t be a hassle anymore because you can look back at previous budgets to help you create your budgets quickly.

Purposeful Pay Period Budget Template

I hope this post helped! My Google Sheets budget template works with every pay schedule. Track up to six paychecks each month! Find it here.