How To Create a Biweekly Budget in Just 4 Easy Steps

If you get paid every other week, which often comes out to twice a month, a biweekly budget may be right for you. This type of budget involves planning your spending and saving around each of your two-week pay periods.

This can be more effective than a monthly budget when it comes to paying all your bills on time, as well as reaching your savings goals and spending within your means. To create this budget, you’ll need to set aside some time to review your finances. 

What is a biweekly budget?

For anyone who is paid every other week, a biweekly budget can be the most straightforward way to manage your finances.

Because your bills aren’t due all at the same time but rather throughout the month, a biweekly budget allows you to more accurately and closely allocate funds to your expenses. You simply apportion money from your first and second paydays to handle the different bills in the first and second halves of the month, respectively. 

Emily Guy Birken, co-author of “Stacked: Your Super-Serious Guide to Modern Money Management,” says a biweekly budget is a “bite-sized way to look at your money more often” than you would with a monthly budget.

“You have to check in on things when you get your paycheck, so if you realize you made a math error or forgot about an expense like school fees, it’s a lot easier to course-correct if you only have to think two weeks ahead — instead of a month — to get it fixed,” Guy Birken says.

Steps to create a biweekly budget

As with any type of budget, creating a biweekly budget involves listing your expenses and planning for when to pay each of your bills. It also involves determining how much money you’ll devote to savings from each paycheck. Here’s how to set up a biweekly budget in four steps:

1. Create a list of your income and expenses.

Go through the past several months of debit and credit card purchases and your checking account to get a proper account of your expenses. Then, review your checking account for income earned, including paychecks and money received from side gigs or other sources.

If you use cash often or get paid in cash, you’ll need to monitor the comings and goings of your money for a month or two, instead of looking at past months’ receipts. 

You can track expenses and income using a spreadsheet, such as Microsoft Excel or Google Sheets. You could also use a budgeting app or the old-fashioned method of writing it out with pen and paper. If you’re a whiz with spreadsheets, using one for your monthly budget allows you to try on “what if” scenarios, trying out which expenses you could cut and seeing how that affects your ability to save. 

As with a monthly budget, you’ll break up your expenses into fixed expenses as well as variable ones. 

Income

First, list the amount of money that comes in each month, after taxes are taken out. This is the amount you have available for spending and saving. Account for your salary and any money that might come in from tips, commissions, side gigs, interest earned on savings accounts and any other sources. 

Fixed expenses

These are bills and other expenses that remain the same, so you know exactly how much money to allocate to them on a regular basis. Examples of fixed expenses include:

• Rent or mortgage
• Cell phone
• Internet
• Car payment
• Student loan payment
• Other debt repayments, such as credit cards 
• Childcare
• Gym membership
• Streaming services and other subscriptions
• Insurance premiums (health, life, homeowners, renter’s)

Once you have this list, take the time to examine each expense to see if it can be reduced or eliminated. Ask yourself: Are you really using that gym membership? Can you can find a better deal on your cell phone?

In addition to monthly expenses, look for fixed expenses that are charged on a regular basis, but may only be billed quarterly or twice a year instead of every month. Be sure to add these to your list, as well (and learn how to budget for them below). Examples of these kinds of expenses include:

• Car insurance
• Property taxes
• Tuition

Variable expenses

These expenses can change regularly, so they aren’t as predictable as fixed expenses. You’ll need to find averages for each one based on previous months’ spending. If you can make the time, look at a whole year’s worth of these expenses and then divide either by 24 or 26 (depending on how often you get paid) to see how much you’ll need to put aside per paycheck to cover them.  

Because you have more control over many of your variable expenses than fixed ones, you may find some categories in this group that you may eventually decide to cut back on.

Examples of variable expenses include:

• Groceries
• Utilities (gas, electricity, water, garbage)
• Dining out
• Car repairs and maintenance  
• Transportation costs (gas, parking, tolls, public transportation)
• Home repairs and household items
• Clothing
• Personal items (soap, shampoo)
• Services (laundry, haircuts)
• Entertainment (this can include streaming services, which were accounted for in “fixed expenses”)
• Medical bills
• Pet care
• Gifts and special events
• Travel expenses

2. Put your expenses on a calendar.

For an easy view of your biweekly budget, list your paydays on a monthly calendar, and then add bill due dates and other planned spending. This provides a handy snapshot of money coming into and leaving your account. 

Putting your bills on auto-pay can help eliminate the chance of missed payments and late fees. Schedule to them to pay them a few days before they’re due to avoid possible processing delays (such as holidays) that could cost you penalties and interest. 

If your bank charges overdraft fees, you need to be sure you have enough money to cover these automatic expenses. Or, find a checking account that won’t charge you for overdrafting.  

Whether you use a paper calendar or one on your computer or smartphone, visualizing when your expenses and paydays occur helps you better plan how to use each paycheck.

3. Create two biweekly budgets.

Once you’ve established your income and expenses as well as when money is needed for each bill or other expense, set up two biweekly budgets. You can do this using pen and paper, a spreadsheet or a budgeting app. One method when using a spreadsheet is to create two separate tabs for each of the budgets.

To make these two budgets, list your income, expenses and savings deductions, along with corresponding paycheck dates and due dates. List the dollar amount next to each paycheck or expenditure. Refer to the calendar you created to determine which bills and other expenses fall under each pay period. You may decide to devote funds from both paychecks to certain larger expenses, such as your mortgage or rent.

During each pay period, look at the expenses you’ve assigned to that timeframe and make any non-automated bill payments at this time. If you don’t have automatic transfers set up to go to your savings account, initiate these transfers manually.

4. Monitor your budget regularly.

Now that your biweekly budget is set up, refer to it frequently throughout the month. For the first few months, check in each pay period to see if your plan is working out. If you see big differences between what you budgeted for and what you spent, it’s time to re-evaluate.

Things to take note of include:

• Spending: Are you spending more or less than you’d planned for things like dinner out, clothing or groceries? Adjust your spending accordingly, or consider increasing the amounts allocated to such categories during an upcoming pay period.  
• Upcoming bills: Pay any bills that are due soon that aren’t on autopay.
• Saving: Be sure to transfer money into your savings account, as planned.

In addition to monitoring your budget, it often pays to balance your checking account regularly. Make sure the transaction amounts you have recorded match what’s listed when you log onto your bank’s website or app. This way, you’ll be able to catch any mistakes (on your part or that of the bank) as well as any fraudulent activity.

Using your budget to save money

Once you’ve tallied your expenses and income, look at your savings goals and see if you can meet them. If you can’t, see how you can cut expenses and increase income so you can have a solid emergency fund built up (that’s about three to six months worth of living expenses) and so you can work toward other crucial savings goals, such as retirement.

Many savers prefer to include a category in their budget for money that’s earmarked for savings — and to assign an amount to it, accordingly. You can opt to split your paycheck so a portion is automatically going into your savings account, or set up automatic transfers with your bank. 

How to budget for non-monthly expenses

Whether you have a monthly or biweekly budget, you’ll likely have some bills that are paid on a non-monthly basis, such as car insurance, property taxes and tuition.

It’s a good idea to devote money every paycheck (or every month) to such expenses so the money is there when the bill is due. Consider putting the money for these expenses in a separate account like a savings account or money market account. This way, you can keep the money for those expenses safe from accidental spending and have it earn interest, too. 

Some savings accounts even let you set up savings categories or buckets, so you can put away money for specific categories such as “property taxes,” “car maintenance” or “vacation fund.” 

Once a non-monthly bill comes due, simply transfer the money from your savings account to your checking so it can be paid or pay it directly from the other account if it offers bill pay features.

Advantages of a biweekly budget over a monthly budget

A biweekly budget often involves looking at your personal finances more often than you would with a monthly budget. This way, you may realize sooner if you’re overspending and make adjustments accordingly.

“Biweekly budgeting is a much gentler approach [than monthly budgeting], and it makes sure you pay attention to your money more often,” Guy Birken says. “It’s like the difference between doing laundry once a month and doing it once a week.”

What’s the difference between biweekly and twice a month?

Being paid biweekly means receiving your paycheck every 14 days, no matter what day of the month payday falls on. If you get paid this way, there will be two months each year in which you receive a third paycheck. With this system, you’ll be paid 26 times per year. 

Conversely, being paid twice per month typically involves receiving your paycheck on the 15th and 30th of each month. If you’re paid twice a month, you’ll receive 24 paychecks per year.

What to do when you get a third monthly paycheck

Being paid biweekly means you’ll receive direct deposit or a paycheck every 14 days. As such, there will be two months each year in which you’ll get a third paycheck. For instance, if you’re paid every other Friday and get a check on the first of the month, chances are you’ll receive a third paycheck before that month ends.

With your budget in place, decide the best use for any “extra” money during this pay period that doesn’t need to go to bills. Some options for this money include:

• Add it to your emergency fund.
• Save it in your high-yield savings account for short-term saving goals.
• Put it into a certificate of deposit (CD) for longer term saving goals. 
• Add the money to your retirement savings, such as your IRA.
• Move it to an investment account.
• Pay down high-interest debt, such as credit card debt.
• Invest in something that could increase your income, such as enrolling in a course that can teach a new skill or give you a certification.
• Make an extra mortgage payment.

Bottom line

Creating a biweekly budget may take some work on your part initially, yet it’ll provide you with an efficient system for paying your bills, saving money and living within your means. For additional ways to strengthen your money management, consider strategies such as the 50/30/20 rule or a zero-based budget.