Bi-Weekly Paycheck

Sorry F.O.B. with YNAB. Still paying off my debt and still living paycheck to paycheck, with the goal of being debt free, and a month ahead. Just can't wrap around the bi-weekly paycheck. I see the videos but they are all "I get paid on the 1st and 15th." I unfortunately do not get paid like that. For example in April, I was paid on the 9th, and will be paid next on 23rd, and in some months will be paid three times. What's the YNAB way in carrying over the money to the next month will still keeping the goals. Is there a video that show's it or any recommendations?

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  • I can't speak for anyone else, but the way I handle this is as follows:

    My paycheck on the 9th is responsible for all of my regular living expenses until the 23rd. It's also responsible for half of my monthly bills and true expenses.

    My paycheck on the 23rd will be responsible for my regular living expenses until 5/7, as well as half of my monthly bills and true expenses.  

    Because of the way my bills fall, and where I'm at in the year, the 9th was actually my second check to go toward April bills and the 23rd will be the first to put toward May bills and true expenses.  

    Twice a year this results in an extra paycheck that's only responsible for regular living expenses for the next two weeks and is not required for true expenses or bills.  We use the extra to pay down debt, but it could be used to bulk up true expenses, work toward getting a month ahead, build savings, etc.  I identify these extra paychecks by making sure that the two that follow them will arrive in time for all of our bills.  If we weren't aggressively paying down debt, I'd probably just get way ahead and build my Age of Money.

    In regards to the goals, I think I need a clearer explanation as to what you're looking for.  

    I hope that's helpful.

    • ChasingPar 

      The big question is when I have money left over at the end of the month the totals kind of get confusing when it carry’s over. So let’s say I budget $400 for restaurants but still had $50 left for the previous month. My budget will show $450 for the month. I guess I answered my question but just kinda confusing, (not anymore more) my dumb but just had to type it in. 

      I guess I can just let it carry over like you all said. Thank you all.

    • Green Guitar At the end of the month, you can "sweep" categories like restaurants/groceries and move the leftovers to a high-priority savings category. Then you won't accidentally inflate spending over time, too.

  • You have a few options:

    1. Budget bi-weekly and recalculate your needs every time. I don't recommend maintaining this because it's a lot of work, but it will keep you covered when you're starting out or when you're in a transitional period.

    2. Determine what categories each paycheck will fund (e.g. 1st check fills up groceries/bills, 2nd check fills up true expenses/savings) and set appropriate goals. When budgeting, select the paycheck  category group (s) and BAM! Funded. Three paycheck months are treated as a windfall and go to highest priority.

    3. Each paycheck funds a normalized amount, so half of your monthly normalized amounts. It's useful to put the number in the category name so you can just rip through and type things in for the first check, then click underfunded to fill the goal for the second check. Three paycheck months are treated as a windfall and go to highest priority.

    4. *Recommended Approach* Get where you don't have to touch the money you earn in one month until the following month (you only need two 3-check months to get there with "windfall" savings). Then you budget all the money you receive in April in the May budget, at the beginning of May. This is beneficial for so many reasons.

    Look up using an Income for Next Month category to save work and minimize user errors.  I wrote a post called "Trying Out the YNAB Buffer" that has a lot of details. I'll see if I can link in a bit.

    5. This is really a sub-option that works best when you're truly budgeting on last month's money: normalize those 3-paycheck months to their annual impact. So, here you'll budget the 3rd paycheck amount to a holding category. Each month, you'll release what is needed (1/6 is an easy number) to use in the regular budget. The benefit here is that your normal monthly budget can do more with less swinging changes. Obviously, the 3rd checks would cease to be windfalls if you use this workflow. 

    How do these options sound? Play around in a sandbox budget to practice, and ask whatever questions you need!

  • Also, on a really basic note (since you said you're new), any money that is left in a category in April will carry over to May's available. The budget cells, which represent money moves in and out of each category, will be empty. 

    You can click ahead to May now and see how it works.

    Goals... well, I only use the monthly contribution (maybe it's called Savings Builder now) because I don't have patience with the others. They will look at whatever criteria they look at to calculate in the new month - available, budgeted, timeline, etc. The Spending goal won't calculate in the May budget page until May 1st, which is why I don't use it. 

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      • Navy Blue Mixer
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      Move Light Sound Life I sort do a mix of budget categories. Almost all of my True Expense categories (unless I have a hard target by a set date) are Monthly Savings Targets. The ones with hard goals are Savings Balance (sometimes with a period, sometimes just "eventually"). Anything that's a periodic expense, though (Monthly Bills, Frequent Bills, Food) are Spending Targets.

      Back to the topic, I also receive paychecks biweekly. I've been behind lately, but thanks to this year's bonus, I had a windfall, so I decided to get back to YNAB and get things set up right. I am now basically a half month ahead (after covering all of December). When April rolls around, that will be my first three-paycheck month, and I expect to be able to use that to be "fully ahead," since my second and third April paychecks will fully cover May. I'm pretty excited!

      I have a "One More Paycheck Ahead" category set up for this, as well as a "One More Month Ahead" category because I still want to stockpile months. After I feel I'm comfortably ahead, I'll start putting these directly to "Prudent Reserve" (the Emergency Fund, which for now just has a savings target).

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  • Chiming in late on this but I thought I would address one of the problems that the OP has. 

    Green Guitar said:
    Just can't wrap around the bi-weekly paycheck. I see the videos but they are all "I get paid on the 1st and 15th." I unfortunately do not get paid like that. For example in April, I was paid on the 9th, and will be paid next on 23rd, and in some months will be paid three times.

     The problem here is one of terminology.  My understanding of bi-weekly is every other week. This is because from a payroll processing perspective, this is what it is called. Every other week results in 26 pays per calendar year, resulting in the occasional 3 paycheque month.  The videos the OP mentioning using bi-weekly (haven't seen the videos myself so not sure if this term was used in the video or whether the OP calls it bi-weekly) are actually semi-monthly (paid 2 times per month).  This is common.

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