How to budget when you get paid twice a month
Give each of the 24 cheques the bills that fall before the next one, because semi-monthly pay arrives on fixed dates — usually the 15th and the last day — and so do most bills. This is the one schedule where paydays and due dates line up, and the price of that neatness is that a third cheque never comes.
Both sides of the calendar are fixed
Semi-monthly pay does not drift. The 15th is the 15th every month, and the last working day is the last working day. Rent is due on the 1st every month; the card statement closes on the same date every month.
That is an advantage no other schedule has, and it is worth using directly rather than averaging it away. You can name, in advance, which cheque pays which bill for the whole year.
Assign bills to the cheque before them
Write out the due dates, then hand each bill to the payday that precedes it. The end-of-month cheque usually inherits rent on the 1st and anything early. The 15th inherits the middle of the month.
Doing it this way often reveals the real problem, which is rarely the total: one of the two cheques is carrying most of the fixed cost while the other looks generous. Moving a due date by a few days — most billers allow it — evens the two halves out permanently.
24 cheques, and never a spare
Twice a month is exactly 24 a year. Every month contains two and only two, so there is no month that quietly arrives with an extra one the way a biweekly year does twice.
Anyone moving here from biweekly pay should expect that. The annual amount can be identical and the experience is not, because on this schedule slack has to be created deliberately — nothing in the calendar produces it for you.
The gap that is thirteen days and the gap that is sixteen
The halves are not equal. From the 15th to the end of a 31-day month is sixteen days; from the last day to the 15th is fifteen or fewer. Spending at one rate across both means the longer half runs short.
Working out what is left per day rather than per half fixes it, and the figure differs between the two halves of the same month by design.
Written by Larder, makers of an envelope budgeting app for iPhone. Last reviewed .