Having money in the bank is always a great feeling. Perhaps that’s why every other Friday is my favorite day of the month (I get paid biweekly). Yet, I’ve found that the easiest way for me to manage my money, and not have it disappear without doing what I need it to do, is to break up my bills and saving goals by pay period. What I’ve done here is important. I created a money routine that works for me, but this isn’t any old money routine. This payday money routine helps me maintain productive money habits as soon I get paid!
What is a payday money routine?
While I encourage you to have regular money check-ins every month, I’ve found that I better manage my money when I create short sprints.
Since I get paid every two weeks, I consider each paycheck a two-week sprint.
How I do it: The day I get paid (or a few days before) I figure out where my money is going for the next two week period.
How much of this paycheck will I use to pay bills, save, invest or pay off debt?
I often do a combination of all four things during each two-week sprint. Now if you get paid weekly, consider managing your money in weekly sprints. If monthly, plan for the entire month.
We dive more in-depth into creating money routines in my Back to Budgeting Basics course. In this course, I teach you step-by-step how to create and maintain a budget, save money and achieve your financial goals.
Do I live paycheck-to-paycheck?
Yes, you can say that, but I don’t see it as necessarily a bad thing. I live paycheck to paycheck because I assign tasks to every paycheck.
That means that every dollar I earn has a job – either spend, save, invest or pay off debt. And I always plan to have $0 left over at the end of a two-week sprint.
With that being said, here are the three things I do every time I get paid.
My Payday Money Routine Essentials
Move extra funds into savings.
How I do it: The night before I get paid, I check my bank account balance. If I didn’t spend everything in my budget, I move any extra funds into my savings account. This goes back to the concept of zero-based budgeting. Zero-based budgeting is when you have $0 leftover in your budget when you subtract your expenses from your income.
Pay as many bills as possible.
Since I get paid twice a month, I split my two paychecks. One paycheck covers bills and saving goals from the 1st to the 15th of the month while the second paycheck covers expenses from the 16th to the end of the month.
How I do it: The day I get paid, I pay as many bills that I can for the next two weeks.
Why pay bills the day you get paid?
The day you get paid you have an influx of cash but that’s not necessarily all yours to spend because a lot of the money is already earmarked, set aside to pay bills, right?
How I do it: I like to pay my bills the day I get paid because the next day my bank account more accurately reflects my account balance. Now that all of my bills are out of the way for the next two weeks, I can clearly see how much money I have remaining.
Doing this gives me a much clearer picture of what’s going on in my finances and as a result, I can make more informed financial decisions which ultimately prevents overspending.
Paying all of my bills for the next two weeks also helps me avoid overdraft fees, interest fees, and late fees.
How to keep track of your bills?
This spreadsheet makes tracking your bill due dates a lot easier, and as a result you’ll know exactly which bills to tackle next.
Ever forget when your phone bill is due and then you get hit with a $10 late fee? Well, with this bill tracker, get organized and count on that not happening anymore!
Create a to-do list.
When you’re digging into your finances and making payments, you may realize that you have to follow-up on certain things. This may mean disputing a charge, transferring funds from one account to another, or opening a new bank account.
How I do it: During my payday money routine, I always have a pen and paper handy so I can write down next steps.
I might even take it a step further by creating a calendar invite just to make sure that I don’t miss any important dates.
Up next, read how having multiple bank accounts can work for you.
Found this article helpful?
I detail all the steps to create a budget in my course Back to Budgeting Basics. Learn how to set achievable financial goals, track your expenses and live life on your own terms by budgeting every month.
Do you have a payday money routine? What do you do?
Danielle Desir is a financially savvy traveler, 5x author, and podcaster. She paid off $63,000 of student loan debt in 4 years, bought a house at 27, and has traveled to 27 countries. She refuses to let her financial responsibilities hold her back from living life on her terms. Listen to The Thought Card Podcast here.