How to Budget When You Get Paid Semi-Monthly

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

In this article, I discuss how to budget by semi-monthly pay periods, so you can feel confident about budgeting your paychecks. When you get paid semi-monthly, you receive two paychecks each month. While your pay schedule is predictable and consistent, you may have to pay more bills in one half of the month than the other half. With an effective budget template and routine, you can easily budget and keep track of your semi-monthly pay periods.

When you get paid semi-monthly, you receive two paychecks usually on the same days of the month (if your pay day falls on a weekend or holiday, you may get paid a day or two earlier). It’s very similar to the bi-weekly pay schedule, except instead of 26 paychecks each year, you receive 24. Let’s take a quick look at the advantages and disadvantages of this pay cycle.

Advantages of Semi-Monthly Pay Schedule

The semi-monthly pay schedule has my heart because it’s the one I’ve been budgeting since the start of my budget journey. My husband is the main provider for our family, and he gets paid semi-monthly on the 10th and 25th of each month. It’s not as common as the bi-weekly pay schedule, but I can tell you there are numerous benefits to it.

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 Semi-Monthly Pay Schedule

As with every pay schedule, semi-monthly pay comes with some disadvantages as well.

Slightly more distance between paychecks than the bi-weekly pay schedule, so you really have to make sure to stretch out your income
Typically not best for hourly employees (more suitable for salaried employees)
Holidays or weekends can change the pay date

How to Budget Semi-Monthly Pay Periods

Using my pay period budgeting method, there are four steps to budgeting when you get paid semi-monthly. Following these steps, you will be able to budget your semi-monthly paychecks for the entire next month.

See the Semi-Monthly Budget Example below for an example on how these steps are implemented!

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

List the dates of the two pay periods that take place next month. Start with any pay period that begins in your current month, but crosses over into the next month.

End with either the pay period that ends exactly on the last day of the month OR the pay period right before any pay period that takes place between the end of next month and the start of the month after that (I’ll explain this method further in the Budget Example below).

These two pay periods make up your budget month. You will create a separate budget for each pay period of 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.

Allocate the income of each paycheck 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.

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

With a semi-monthly pay schedule, you have two pay periods in the month. If during one pay period you have more bills to pay than the other pay period, you may need to spread some of the income into the other pay period.

For instance, if most of your bills are paid during the first half of the month, you know you need to set aside a portion of your income from your paycheck in the second half of the the month to pay those bills coming up at the beginning of next month.

Creating a pay period budget for the whole month allows you to determine where you might need to adjust your money flow.

Semi-Monthly Budget Example

To help illustrate budgeting when you get paid semi-monthly, we will use an example of a single teacher named Sarah who is paid $2,000 twice a month on the 1st and 15th of the month. Let’s build her April budget:

Step 1

First, Sarah should write out the two pay periods that take place next month:

March 31-April 13, 2023
April 14-30, 2023

Since April 1st and April 15th fall on a Saturday this year, she receives her paycheck a day early on Friday. The first pay period starts in March, but since April 1st falls within the pay period, it is the first pay period of the month using my system.

The last pay period of the month falls directly on the last day of the month, but that’s not always the case. If it did not, you would choose the pay period right before the pay period that contains May 1st. The pay period that contains May 1st would be the first pay period of May.

That’s how I determine the first and last pay periods of the budget month.

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 each pay period of the month. I will write out one semi-monthly budget example:

Income

Total = $2,000

Expenses

Giving – $200
Saving –
Food – $200
Utilities –
Housing – $1,200
Transportation – $120
Health – $30
Insurance –
Childcare –
Lifestyle or Entertainment – $50
Personal Spending –
Miscellaneous –
Debt – $200

Total = $2,000

Step 4

After making each semi-monthly budget for the month, Sarah needs to adjust any pay periods where there isn’t enough money. As shown by the example above, she had to pay for housing that pay period, but she did not have to pay for utilities or insurance. If she had to pay for more bills during that pay period, she might not have enough money.

If there is a pay period where there isn’t enough money for all of her expenses, it would be wise to set aside money from a previous check to spread out the income.

How to Budget When You Get Paid Semi-Monthly Tips

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

Adjust the due dates of your bills.

Some companies allow you to do this. If you have too many bills due at once, you can try to spread them out a little.

Open a bills bank account.

If you have pay periods where you have more bills or expenses than other periods, consider opening up a bank account just for bills. Transfer extra money to it during pay periods with fewer bills, and use that money during pay periods where you have a lot of bills.

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 $2,000 every twice a month. You could put $400 towards your debt twice a 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 helps you budget semi-monthly! My Google Sheets budget template works with every pay schedule. Track up to six paychecks each month! Find it here.