How to budget biweekly

Creating a biweekly budget is an effective way to manage finances, especially for individuals who are paid every two weeks or want to handle their spending more frequently. A biweekly budget helps allocate income toward expenses, savings, and financial goals in a structured manner.

This guide provides practical tips on how to budget biweekly and show how this approach can benefit overall financial health.

Making a biweekly budget

To get started, it’s important to understand the basic steps of how to create a biweekly budget. The personal budgeting tips below are easy to follow and implement day-to-day.

List your income and expenses

The first step in creating a biweekly budget is to list income and expenses. This means calculating all income from various sources over each two-week period, which might include salary, freelance work, or other sources.

Once all types and amounts of income have been added, it’s time to list all known expenses. Expenses can be categorized into fixed costs and variable costs.

• Fixed costs are regular, predictable expenses like rent or mortgage, car payments, student loans, gym memberships, and streaming services. These are payments scheduled to occur every month.
• Variable costs are more discretionary expenses that fluctuate. This might include dining out, groceries, transportation, clothing, entertainment, and personal care items.

Clearly identifying fixed and variable costs makes it easier to see where money is going each period, what can be cut back, and how much will be spent in each category in the future. It sets the stage for improved financial planning.

Allocate funds for savings and goals

After expenses have been determined, it’s important to allocate funds for savings and financial goals. This could include setting aside money for an emergency fund, debt repayment, or even a vacation fund.

Now is the perfect time to start saving, which could start by using PayPal Savings¹ to set aside a portion of income for an emergency fund. This emergency fund could be used to cover unexpected expenses like car repairs or medical bills. Having emergency savings can help prevent the need to take on debt in a financial emergency, while also helping reach general savings goals faster.

PayPal Savings has an auto-save capability, helping users stay on track. They can have a specified amount automatically moved into their savings account each week, biweekly, or monthly. It’s possible to have different pots of money to set aside savings for specific goals. And you earn interest to boot!²

Use a budget spreadsheet or tool

One of the simplest ways to stay organized when budgeting is to use a biweekly budget spreadsheet or a budgeting app. These tools can help users track income and expenses while making progress toward financial goals. A well-structured spreadsheet can make it easy to visualize a financial plan, track spending, and automate calculations using spreadsheet formulas.

There are many apps available that make expense tracking simple and intuitive.

Track spending

Regularly tracking spending is one way to stay on top of the budget. Monitoring spending habits and identifying areas that could be cut back is essential for maintaining a healthy financial outlook. Being flexible in accommodating small changes, like cutting down on dining out or unnecessary subscriptions, can make a big difference over time.

PayPal is one example of how an app to track expenses can monitor spending on the go.

Monitor and adjust the budget

Financial situations can change overnight, so it’s important to regularly monitor your budget and be flexible enough to adjust it as needed. Whether unexpected expenses come up, or you receive a bonus or pay raise, adjusting your budget will help keep your financial plan aligned with your new reality.

Potential benefits of a biweekly budget

A biweekly budget offers several potential benefits. Here are some of the possible advantages:

Expense tracking

A biweekly budget allows expenses to be tracked more frequently, which can lead to improved financial oversight. By reviewing your budget every two weeks, you could be more likely to spot spending trends and adjust your habits accordingly. Using budget and money saving apps can help keep you motivated and stay on track.

Savings opportunities

Setting aside small, consistent amounts every two weeks can be easier than trying to save a large sum once a month. A biweekly budget and the regular use of spreadsheets and other tools can help identify more frequent savings opportunities to help build savings over time. Start saving with PayPal.

Helps reduce debt

Biweekly budgeting can help people focus on reducing debt. Making debt payments every two weeks can decrease the amount of interest paid in the long run. This is because biweekly payments lower the principal debt amount more frequently, thus lowering interest costs over time.

Financial awareness

Planning a budget every two weeks can increase financial discipline and awareness. Tracking your finances more often can lead to a better understanding of spending habits, which in turn can lead to smarter financial decisions.

Handle unexpected expenses

Life is unpredictable, but having a biweekly budget helps you prepare for unexpected expenses. It allows you to set aside funds for irregular bills and spread out the financial impact over multiple or shorter pay periods, making it easier to absorb the cost. Some examples of unexpected expenses might include a medical bill or sudden car repair.

Bill cycle alignment

Aligning your budget with your bill payment cycle can help ensure you have enough funds available to pay bills when they are due. This can help you avoid late fees and the stress of last-minute payments.