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I'm terrible at managing my money. This is likely the cause for this entire issue.

I'm being moved from a bi-weekly (1st and 15th of the month) pay schedule, to a weekly pay schedule. At the same time, I am receiving a pay increase of 30%.

My previous plan, which had been working quite well, was to pay my rent (due on the 1st of the month) from the paycheck on the 15th of the month before (so on Jan 15 I would pay my Feb 1st rent), and I would pay the remainder of my bills on the first of that month (Utilities, car payment, student loans etc. for Feb would be paid on Feb 1).

Moving over to this new pay schedule, I'm worried that I will end up falling behind on my payments, because "I'll just get another paycheck next week" ad infinitum, as well as the fact that I'll have a lot (30%) more in my paycheck than I have experience with.

What things can I do, or strategies can I adopt to ensure that this doesn't become a problem?

(I couldn't find a personal-finance tag).

  • 3
    What you describe as moving from is actually a semi-monthly schedule (twice per month, or 24 times per year), not bi-weekly (every two weeks, 26 times per year). Also, FWIW, the entire site is for personal finance, hence no need for such a tag. – Chris W. Rea Sep 29 '16 at 23:52
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This is really just a matter of planning. It's good that you don't want the train to go off the rails but really you just need to budget your fixed expenses. I do this by having two checking accounts. One account gets a direct deposit to cover all of my fixed expenses, the other is my regular checking account.

Take your rent and other fixed expenses, if you have any, and total them. Take that total and divide by four. That's how much of each check you should be socking away in to the separate account.

Additionally, with a 30% pay increase you can probably start a savings account. You should start to establish an emergency fund so this really never becomes a problem. Take 10% of your pay and put it in savings, this will still leave you with a healthy pay increase to enjoy but you'll keep some of your money for yourself too.

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Its really, really good of you to admit your short comings with a desire to improve them. It takes courage. Keep in mind that most of us that answer questions here are really "good at money" so we have a hard time relating. Would you want people that are bad with money answering questions on a personal finance site?

While it is intimidating you will need a budget. A budget is simply a plan for how to spend your money. Your budget, based on your new pay frequency, will likely also need some cash flow planning as a single paycheck is unlikely to cover your largest expenses. For example your rent/mortgage might be less than a single paycheck so you will have to save money from the previous paycheck to have enough money to pay it.

Your best bet is to have a friend or relative that is good with money help you setup a budget. Do you have one? If not you might inquire about a church or organization that offers Financial Peace University. The teachers of the class often help people setup a budget and might be willing to do so for you. You could also take the class which will improve your money management skills. For $100 you'll have a lifetime pass to the class. If it helps you avoid three late charges/bounce checks then the class is well worth it.

Now as far as spending too much money. I would recommend cash, but you have to do it the right way. Here is the process that you have to follow to be successful with cash:

  1. Using your budget determine the amount of money you can withdraw from the bank. In each category (clothing, food and entertainment are typical categories).
  2. Withdraw that amount, dividing it into the categories.
  3. Only spend that cash on that category. If you don't have enough or don't have it with you pass on the purchase.
  4. When the money is gone, you are done spending until the next paycheck.

Doing cash will give you a more concrete example of what spending means. It won't work if you continue to hit the ATM "for just $20 more". It will take you a bit to get used to it, but you will be surprised how quickly you improve at managing money.

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Unlike other responses, I am also not good with money. Actually, I understand personal finance well, but I'm not good at executing my financial life responsibly. Part is avoiding tough news, part is laziness.

There are tools that can help you be better with your money. In the past, I used YNAB (You Need a Budget). (I'm not affiliated, and I'm not saying this product is better than others for OP.) Whether you use their software or not, their strategy works if you stick with it. Each time you get paid, allocate every dollar to categories where your budget tells you they need to be, prioritizing expenses, then bills, then debt reduction, then wealth building. As you spend money, mark it against those categories. Reconcile them as you spend the money. If you go over in one category (eating out for example), you have to take from another (entertainment). There's no penalties for going over, but you have to take from another category to cover it. So the trick to all of it is being honest with yourself, sticking to it, recording all expenditures, and keeping priorities straight.

I used it for three months. Like many others, I saved enough the first month to pay the cost of the software. I don't remember why I stopped using it, but I wish I had not. I will start again soon.

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