How To Budget Using The Half Payment Budgeting Method
Have you ever had months where your bills seem so unbearably heavy some paycheques and light the other paycheque? One week you might feel like you have barely any money left over for groceries and yet the next paycheque you feel like your rolling in it. Trust me, I’ve been there! But I have a successful method that truly works and will break that cycle. The half payment budgeting method is a great technique to use to get a handle on your budget and bills. This method is the process of putting half of your bill amounts away with each paycheque
Who Does The Half Payment Budgeting Method Work For?
This method works best for those who get paid every two weeks (bi-weekly) or twice a month (usually somewhere around the 15th and 30th).
What is The Half Payment Budgeting Method?
Simply put, it is a method where you take the total amount of all your regular monthly bills and split it in half. Each paycheque you put half of the total bill amount to the side so that at the end of the month you can pay it in full. This way you are spreading out your expenses over the month instead of eating rice one pay period and top sirloin the next. You can avoid feeling strapped for cash at some point in the month with this method.
Keep reading for a breakdown of how to do this.
But wait, my bills aren’t all due at the end of the month?
Two Options If Your Bills Have Varying Due Dates
Option 1: You could physically try to pay half of your bills each pay period. But be cautious as some lenders don’t allow this, so this is the riskier option that I wouldn’t necessarily recommend.
Option 2: The one I absolutely recommend and that we personally use. Change your payment due dates to be at the end of the month. Usually anywhere between the 25th-31st works great!
If you don’t know how to change your payment due dates or didn’t even know this was possible, read my easy tips on how to do this here.
How To Do The Half Payment Method
Ok, let’s break this down in a hypothetical example of what your bills MAY look like without the half payment method. Budget hypothetically made on a $3,600.00 monthly income.
Example 1:
Income: $1,800.00
Rent/Mortgage: $1,500 due on the 1st
Internet: $40.00 due on the 15th
TV: $90.00 due on the 30th
Car Lease: $300.00 due on the 20th
Utilities: $95.00 due on the 21st
Cell Phone: $170.00 due on the 16th
Insurance: $130.00 due on the 12th
Credit Card Debt: $260 due on the 24th
The first paycheque of the month might look something like this (1-15th):
Income: $1,800.00
Rent (always divide your mortgage or rent in half each pay period) – $900.00
Internet: – $40.00
Insurance: – $130.00
Total Bills To Pay = $1,240.00
Total Left Over With Paycheque 1 = $730.00
The second paycheque of the month might look something like this (16th-31st):
Income: $1,800.00
Rent: – $900.00
TV: – $90.00
Car Lease: – $300.00
Utilities: – $95.00
Cell Phone: – $170.00
Credit Card Debt: – $260.00
Total Bills To Pay = $1,815.00
Total Left Over With Paycheque 1 = $ – 15.00
Do you see how scary that is? One pay period you feel like you’re rolling in it with the leftover funds, but the next, you are slipping into debt! And if you are already in debt, this is just going to keep adding to it which is a very unsettling situation to be in.
Let’s fix your budgeting problem with the half payment budgeting method
Once again, I highly recommend you change your payment dates till the end of the month. This will take time to do but it will literally set you up for success.
The example below is your bills due now that you’ve changed your payment dates with a hypothetical budget based on a monthly income of $3,600.00:
Rent/Mortgage: $1,500 due on the 1st
Internet: $40.00 due on the 30th
TV: $90.00 due on the 30th
Car Lease: $300.00 due on the 27th
Utilities: $95.00 due on the 30th
Cell Phone: $170.00 due on the 28th
Insurance: $130.00 due on the 30th
Credit Card Debt: $260 due on the 31st
The first paycheque of the month putting 50% of your total bill payments to the side : (1-15th):
Income: $1,800.00
Rent/Mortgage: $900.00
Internet: $20.00
TV: $ 45.00
Car Lease: $150.00
Utilities: $47.50
Cell Phone: $85.00
Insurance: $65.00
Credit Card Debt: $130.00
Leftover amount after putting away 50% of your bill payments for end-of-month payments: $357.50
The second paycheque of the month:
Rent/Mortgage: $900.00
Internet: $20.00
TV: $ 45.00
Car Lease: $150.00
Utilities: $47.50
Cell Phone: $85.00
Insurance: $65.00
Credit Card Debt: $130.00
Leftover amount after putting taking the money you set aside from the last pay period and paying all your end-of-month payments: $357.50
Set yourself up for success with the half payment budgeting method
Do you see how much more effective that is? You now will have the same amount of funds left over each pay period AFTER bills are taken care of. This will allow you to budget the remainder of your funds for food, clothing, gas, etc…
Again, this is just a completely hypothetical budget. Take your budget and do the exact same steps. Make the call to your providers and lenders and get them to change the bill dates that don’t already fall between the 25th and 31st of each month. Trust me, they will work with you no problem on this.
Things to keep in mind
With the half payment budgeting method, you will have more even cash flow and are less likely to have to use your credit card for items. I truly think this method works for everybody, but if you find it’s just not working for you, don’t get discouraged, do what works for your family. Don’t get overwhelmed by calling the service providers and lenders when it comes to changing the payment dates, they do it so quickly. Set aside a morning or afternoon to blitz it and get it all done.
If you don’t even know where to begin with a budget, take a look at my free monthly budget workbook and start there! Then come back to this article and use it as a guide to organizing your half payments. Take action on your finances today!
XO, Asia
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Hi!
For my second paycheque of the month (on the 15th), the half payment method would work fine for me. But for my first paycheque of the month (on the 1st), 50% of my monthly expenses is a larger amount than my paycheque.
How would you recommend using the half payment method in cases like this?
Hello!!
So that is where changing all your payment dates to the end of the month is beneficial because then you have no bills to worry about until the end and at that point you will have enough money in your account to pay them if you’ve already put half (or as much as you can to half) away… if that makes sense..