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Hi, all. I am looking for some advice on the best way to populate my budget. Most budget spreadsheets I see are month-based, which is great as all things that hit my accounts are typically monthly, other than my income which is every two weeks. What do you recommend: do I show two paychecks per month except for the two months out of the year when there are 3, or do I show income as my salary / 24 and show two (adjusted) paychecks per month each month? Are there alternatives? More importantly, all my bills are auto-charged to my credit cards so that I can pay off one lump sum each month, and also get points/miles. Then, my credit cards are automatically paid off just before their due date. How should I account for this in my budget/spreadsheets: mark the expense in the month the expense was incurred, the month it is due, the month it hits the credit card, or the month the credit card is paid? These can be three different months, I think (example: Bill for October shows up November 5th and is due November 25th. It hits credit card on November 25th, and credit card statement comes in 12/5, and is due 12/25. Would you mark that as an October bill, November bill, or December bill?) This shouldn't be an issue for Internet, phone, etc. that don't fluctuate and hit regularly, but I feel a bit lost in the accounting for this. Additionally, are there flaws in the way I'm setting up my budget? Am I missing something blatant? Thanks!
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Nov 23, 2014 00:47
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| # ? Apr 25, 2024 10:42 |
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I am paid biweekly and I've always represented my budget on a monthly basis. My income is calculated as the entire year of wages divided by 12 to get my monthly income. It's not always accurate on a month to month basis because of the extra two checks but it is accurate on a year over year basis. My salary fluctuates with overtime and holidays so it's not even accurate year over year. I always budget based on my 40 hr weekly pay and don't account for overtime and holiday pay, that's just a bonus that goes straight to savings. If your income exceeds your expenses, you can calculate your wage using two paychecks a month and just banking two extra checks a year. It really doesn't matter, it's just what level of accuracy you want.
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Nov 23, 2014 01:46
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Got any yearly payments? allocate 2 pay cycles to them, then ignore them. Budget the rest of your life on 2 cycles per month. If there's leftover from the 2 pay cycles after the yearly stuff, enjoy bonus yearly savings.
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Nov 23, 2014 02:23
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I always budgeted as 2 pays per month and then you get 2 bonus checks a year that you don't even count on for anything. You can use them for big purchases, debt reduction, yearly bills, top off your Roth IRA, etc. Bills should come out when they are paid. Even if you put it on a card once it is charged that money is spent and gone. Paying the card off is just a transfer of the funds already allocated as spent. No flaws in my opinion as this is how I have always done it and it works well. Whether you are missing anything in your budget we can't really say without seeing the actual budget. Sounds like you are on a good track though.
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Nov 23, 2014 15:53
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These were all extraordinarily helpful answers. Thank you!
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Nov 23, 2014 18:56
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