January 6, 2011

No More Monthly Budget

Nathan and I made our first monthly budget for July of last year. Since neither of us used a budget while we were single, a lot of guesswork went into creating it. After a lot of work, we finally decided how to spend every dollar of income we would make that month. Little did we know that Nathan would lose his job a little later that month and not get a paycheck for two months. So, our first few months of budgeting were a little weird, and we've only had three "normal" months to really figure it out.

One thing we have figured out? Making a budget based on the calendar month doesn't work for us. With Nathan getting paid every other Friday and me getting paid every Thursday, our income varies quite a bit each month. For example, in October Nathan got 3 paychecks and I got 4, and in December he got 2 and I got 5. That's a huge difference! We originally based our budget on our average monthly pay by taking our annual net pay and dividing it by twelve, but this meant we were technically spending more than we made some months. This might work for some people, but it bothered us.

The solution Nathan came up with is to base our budget not on the 12 calendar months but on 13 four-week periods. This way, our income for each budget period will be roughly the same. This also means that our expenses will vary each period - we will not pay rent in one period, won't pay electric in another, etc. - but we prefer it this way. Before the start of each four-week period, we will look at what bills we need to pay that period and then decide how to allocate the rest of our income.

Our first budget period began January 2, so it's too early to tell whether or not this will really work better for us. I think it's worth a try though.

Do you use any unconventional budgeting methods?


  1. ya we have a hard time with monthly budgeting too. DH only gts paid on the 15th and 28th. so we try to plan by setting a budget for 1st half and second half of the month. if that makes sense.

  2. I'm interested to see how this works for you!!!

    Thanks for linking up to Try New Adventures Thursday. :D

  3. That sounds like a great solution! We start our budget month on the 15th of each month because my husband gets paid every 2 weeks and I get paid on the 15th. Once or twice a year he gets 3 paychecks during our "fiscal month" so we can make a super big payment on our loans, which feels great!


Let me know your thoughts on this. I love reading all my comments!