Today, I’m going to be talking about paycheque day, which also happens to be the day the most activity happens in my bank account.

So what really happens on paycheque day?

For context, I get paid biweekly; so I’ve devised a planning method that coincides with my biweekly paycheques. Of course, everyone’s paycheque routine will differ based on their spending, bills, pay periods etc, so it’s best to assess your finances, and set a plan that works for your financial situation.

1.

Have a financial budget.

And by a financial budget, I mean, knowing where your money is going or where it’s supposed to go. I mean, you’ll need to know this to have a paycheque routine. What are your needs (rent, groceries, utilities), your bills (pre-authorised payments, credit card payments), your saving goals, your wants? I have all these outlined at the start of the year so what I have to do each payday is allocate the funds to their respective categories. Here’s what I mean.

2.

Since I get paid biweekly, I generally have two paycheques in a month (except for those two months where we get three) so I schedule my bills accordingly.
This will differ from person to person but for me, the largest fixed amount that needs to be paid every month is my rent, so the first thing I take out from one of the biweekly paycheques is that amount. Since this is a sizeable chunk, I have less to allocate to other things from this particular paycheque.

3.

Next my credit card.
Once I’ve taken out the money for my rent, the next thing I do is pay off the amount I’ve used on my credit card the past two weeks. I have a credit card-styled spending, in that, I budget mainly with my credit card. All my pre-authorised payments and most of my daily spending (groceries, etc.) come out of my credit card, so my next course of action is to pay off that accumulated two weeks of spending. In a way, this is the equivalent of allocating an amount for your two weeks’ spending and taking out of it, only I do it on a credit card.

Now, this can be a slippery slope for people who are prone to overspending, or if you don’t get paid biweekly because then interest accrues, but it’s worked successfully for me since I started working, and I’ve never had a situation where I could not pay off that two weeks debt; so here are my two major tips:

• I track all my spending (including pre-authorised) like I literally have a template in my planner where I write them down, and it helps me not overspend, cause I’m constantly seeing how much I’ve spent so far.
• The credit card I use for my spending has a very low limit, so even if on the rare occasion I happen to greatly overspend, it will not set me back because it’s still payable off one pay cheque.

In the future, if I were paid on a monthly basis, I highly doubt this will be practical but for now, it works.

Also, unlike my rent which comes off one paycheque, this comes off each paycheque so it’s either the second amount to be subtracted off my paycheque or the first amount if rent was taken from the prior paycheque.

4.

Now, I’ve gotten all the necessities out of the way and then comes the fulfilling part, savings.
Remember step 1? Knowing where your money is supposed to go? At the beginning of the year, I already have a set amount to be saved from both paycheques. It’s not an equal amount on both of them because remember, one paycheque has rent coming off it.
So once steps 2 &3 are out of the way, I move my savings to the desired account. Some weeks I’m able to add a little bit more to it, some weeks, I save less, and most times, it’s just exact.

5.

After all these are done, I usually have a small amount of money left. This amount I just leave as a placeholder in my debit account, and use it mostly for minute spending. Recently I’ve been putting it into stocks, but occasionally, I leave it for any debit transaction or cash withdrawals.

Now this is what I’ve found works for me, but here’s where it doesn’t work.
I’ve also found that since I just have one saving ‘pot’, whenever I need extra money for a big purchase, I’m reluctant to take that money out of my pot because it will affect my annual saving.
What I plan to do for my next year’s planning, is to include sinking funds, so instead of one saving ‘pot’, I have multiple saving pots, (travel fund, birthday fund, throwing parties fund) some of which I can deep into and one that I mustn’t touch.

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Do you have a paycheque routine? What does it look like?