Ask LH: How Can I Budget When I Get Paid Monthly?

    Hi Lifehacker, I have recently started a new job and got my first pay. Yay! — except I don't get another pay until next month. What are the best strategies for budgeting when you get paid monthly, especially when most of my pay goes towards a mortgage? Thanks, Four Weeks Is A Long Time

    Piggy bank picture from Shutterstock

    Dear FWIALT,

    Like most journalists, I also get paid on a monthly basis. While it initially takes some getting used to, it's really no different to any other pay cycle: you just need to take a slightly different approach to budgeting.

    One effective method is to work out your estimated expenses and then transfer your remaining salary into a separate savings account. This will stop your bank balance from looking deceptively large at the beginning of each month and discourage you from making big ticket purchases that you can't really afford. As an added bonus, you'll be building up an emergency savings account which you can dip into when needed.

    If that seems like too much effort, simply divide your salary in your head into 4.3 weekly allotments. As long as you don't go over this amount on any given week, you should make it to your next payday without going broke.

    Whichever method you employ, it pays to use common sense and frugality when needed — as a general rule of thumb, try to hold off on expensive purchases until just before your next salary payment. If you discover you never have enough money at this stage, you're either budgeting wrong or lack the means to afford that thing you want.

    Still feeling stumped? This in-depth guide includes ten more tips for building the perfect budget. You can find plenty of additional advice via our Budgets and Budgeting tags. Good luck!

    We're also keen to hear our readers' budgeting tricks; particularly while juggling a mortgage. Share your tips in the comments section below!

    Cheers Lifehacker

    Have a question you want to put to Ask Lifehacker? Send it using our contact form.


    Remember there are 52 weeks in a year, which is not 4 weeks a month. You will get a 5th week in a monthly cycle a few times a year.
    For cash/shopping I calculate what I need per week then times by 52 weeks divide by 12 months that is how much is needed to be budgeted a month.
    For utilities its much easier as they are generally Monthly or Quarterly anyhow.

    I have two main accounts, one that my pay goes directly into and another one I use for the direct debit.

    I calculated the electric bill, gas bill, foxtel, phone, internet, insurance etc down to fortnightly amounts and then alot that into the direct debit account each pay day (i get paid FN). The bills come out of that automatically.

    I also have a savings account that I put a set amount into each FN and dont touch it.

    I pay my rent out of the main account, and the rest of the money goes to shopping or entertainment.

    I've been paid monthly for many years and have a pretty simple system that works like this,

    On payday I pay any outstanding bills, rent, and pay off my credit card and put savings into another account, that leaves enough money for living expenses for the next month.

    Its pretty easy once you get used to it, once you determine how much a month costs you to live it becomes second nature, they key is to make all the payments up front and learn to keep costs under control.

    If you can use interest free periods on a credit card do so and pay it off at the end of the month, use their money not yours.

    Remember that banks process your payment after you made it and will include transactions that happened between you making the payment and it being processed in the period (to maximise the probability transactions from earlier in the month fall outside the interest free period, which is why it is essential to pay off the card completely each month).

    Hope that helps.

    Just put your whole pay into a second account and pay all of your bills and buy your groceries as normal. Don't buy anything silly.

    It's not really that difficult - it just requires a little more self control. I prefer it actually - its easier to cover larger bills and add to savings since you know where you stand for the whole month.

    Use the pocketbook site/app. Figure out what amount you can safely spend per month, and set it as your pocketbook safely spend amount. And even if you take your eye off your balance for a few days, it will keep watching, and it sends you weekly updates and warn you how little is left, and how many days it has to stretch.

    I used to take a big chunk of money for bills and groceries, and then have the rest for saving / spending. Take more than you need for bills and groceries and save what's left at the end of each month.

    Most companies/utilities/banks/etc will let you chose which day of the month they direct debit. Which makes it easy to set them all for the day (or day after) you get paid. That way there should be sufficient money to cover these bills reducing the risk of overdrawing. And the remainder is then available to save or spend as you like.

    There may be 4 or 5 weeks in a month, but there is still the same number of days (30/31)

    Just have an amount go into savings which you do not touch and try to have bills / direct debits / transfers scheduled for the day after pay day

    Remaining bank balance = free money for shopping / entertainment etc

    On pay day I pay my credit card off, and then transfer all my "bill money" to a separate account where all my direct debits come out of (mortgage, phone, gym, etc). Some money gets sent to the high interest savings account and what's left is cash for groceries & fun stuff.

    Anything leftover at the end of the month gets transferred into the "bill money" account, to cover future unexpected bills.

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