When budgeting how do you take into account that some income is bi-weekly yet some expenses are on a specific day of the month?

Question

I'm tackling a problem with budgeting in that I'm unsure if I should be making a budget from my weekly/monthly/yearly expenses and income. My income is paid bi-weekly on Friday but I have rent and other expenses on the 1st of the month.

If I look at a 4 week period for my expenses and income it could be drastically different depending on the 4 week period. I have the same problem if I look at multiple 1 month periods.

I've included some simple math examples below pretending that my income is $150 every pay period and my rent is $100 on the 1st of the month.

4 week periods	Jan 3-30 2021	Jan 31-Feb 27
# of Bi-weekly payments	2	2
# of rent payments	0	1
Leftover Money	$300	$200

1 Month periods	Jan 1-31 2021	Feb 1-November 28
# of Bi-weekly payments	3	2
# of rent payments	1	1
Leftover Money	$350	$200

My leftover money is totally different in many of those examples. Should I use data from a longer period of time like 8 weeks/2 months? I'm using excel and like to use exact figures so averaging income/expenses doesn't really reflect what's happening in my bank account. I could theoretically do a years worth of past data but that's seems a tad excessive because my income changes quite a lot month to month and will change a lot for the foreseable future.

Answer 1

Most of us have that same problem, since most people (in the US, at least) are paid bi-weekly.

My suggestion is to "live monthly", and act as if you only get two paychecks per month. Thus, you'd be living on 24 paychecks per year

For all those bills which are due on the first of the month, pay them at the previous EOM (end of month) (either literally or figuratively, by having letting enough money "carry over" in your checking account at EOM (end of month) to the next BOM (beginning of month).

That's how I do it, at least...

Twice a year, you'll get a third paycheck per month. Save that money. What to do with it? Preferably save it "far away" (investments, emergency fund, accelerated debt payment, house DP, etc); however, if you can't live on 24 paychecks per year, then dribble that "third" paycheck into your checking account in equal 1/6th parts over the next six month.

EDIT: the critical part my budget is having enough money in my checking account to last through the 14th of the month (which is of course the longest you can go without being paid). This works well, since I pay for as much as possible with a CC -- and the of course pay the CC in full.