How to Budget as a Couple When You’re Paid on Different Schedules

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If you loved hearing about how to stop reacting to paychecks and create a stronger household budget, check out episode 128 Aligning Finances: How To Budget As A Couple With Different Paydays.

Transcript for “How to Budget as a Couple When You’re Paid on Different Schedules”

Intro: Hi, and welcome to Money Files. I’m Keina Newell from Wealth Over Now. I work everyday with professional women and solopreneurs to help them get out of financial overwhelm and shame so they can experience more flexibility and ease with their finances. Are you ready to gain confidence and learn to manage your finances intentionally? Tune in and grab financial tips that will help you master the way you think about and manage your finances. 

Keina: Hello, and welcome back to another episode of Money Files. So, last week, I kind of tackled this topic, but I really tackled it from thinking about, like, a single  person’s perspective. And I just wanted to blow up any concept or idea that you might  have that your pay date actually matters. And today I want to actually talk to couples  because, one of the things that I see when I work with couples is that oftentimes people  are paid on different schedules, and they don’t know how to manage money because,  like, you know, it could be, “well, Keina, we used to get paid the same, you know, both  of us used to get paid on Friday, and now, my partner got a new job, and so he gets  paid at the beginning of the month”. Right? Or, I’ve even had couples come to me, and  they’re like, “well, Keina, we get a paycheck every single week. So because we get a  paycheck every single week, we’re good. But they wouldn’t be coming to me if they  were good. Let me just tell you the little secret there. So a lot of your decision making  about what you can or cannot do with your finances is based off of this idea of a pay  date. And, friends, I am telling you, I do not care what day of the week you get paid. I do  not care when you get paid. I care that you get paid. Okay? 

And I know that you think  that the problem in your relationship is when the money is coming in, but that has  nothing to do with the actual problem and why you and your partner can’t align on  finances. What’s actually happening for you and your partner is if you are looking at,  you know, when certain checks come in and the dates that they’re coming in and how much they are, what I know is happening in the background is that usually you are taking each individual check and you are saying, like, this check has to pay this. Right?  Check A pays the mortgage because it comes in at the beginning of the month. And then the second check, it pays some of the utilities because they’re not due until after the 8th. And then by the time we get to the third check, well, we just kind of use that to  take care of whatever’s left over. And then we have this check at the end of the month, and we, you know, if we, if nothing else is due, we pay some credit cards off, and then  we spend a little bit. Right? Like, even the description of that, at least for me,  sounds chaotic. And you are mentally splitting your finances by paycheck instead of  thinking about your money as a household, right? What can our money do for us? 

And let me, let me be really, really clear when I’m talking about what can our money do for us? I have clients where sometimes they have combined finances. Like both people,  they have joint finances. And sometimes that structure isn’t a joint structure. It doesn’t  actually matter. I think I tend to lean towards joint finances because that’s what I saw  my parents do. But I’ve coached so many clients that I’m like, I don’t care what you do. I  don’t care if you have joint bank accounts or if you don’t have joint bank accounts. What  I want you to have is a clear line of sight on what does it cost to actually run your  household, right? You can’t be using the numbers that you, that you decided when, you  know, you didn’t have kids five years ago, and you told your, your partner to give you  $1,000 for, for the mortgage and the utilities. And you guys haven’t revisited those  numbers in five years, right? And so, like, those are the things that I’m talking about  when I’m talking about knowing the household number. So I’m not actually saying that  you have to combine finances, but we do need to know, what does it take to run your  household? The things that you have agreed upon are shared expenses. If you are in a  relationship where you’re, you’re not wanting to do a joint account, right? We need to  have some type of shared language for what responsibility looks like in your household.  And that looks different for every single household. That is fine that it looks different for  every single household. I just want it to be agreed upon with the people that live in that 

household. Because otherwise, what’s happening is, is you end up putting yourself in a  paycheck to paycheck cycle. And I don’t necessarily mean like, oh, my goodness, I have  no money. But when I’m defining paycheck to paycheck cycle in this episode, I’m  defining it as you paying this month’s bills with this month’s check. So if it’s April and we  are getting April’s checks, that you are trying to pay April mortgage with the April  paycheck. I don’t want you doing that. I want your April checks to be going towards May  bills. So I want you to be completely out of the paycheck to paycheck cycle and for the  money that you’re getting this month to be funding future bills, not current bills. And so that’s why it matters that we have to not pay attention to the pay date and we need to be paying attention to the household expenses is because we don’t want this, we don’t want to be taking care of, like I said, this month’s expenses with this  month’s paychecks. That’s just not how we want to operate, because that’s also where things get sticky and you are talking about, oh, my goodness, well, your check didn’t  come,  it’s two days late. It shouldn’t matter where the check comes because of how  you’re managing and thinking about your finances. So I want you to be able to have  breathing room. And so being able to have that breathing room means that we want to  be paying this month’s bills with last month’s paychecks. And that has nothing to do with  when you get paid, and it has everything to do with how you are thinking about your  money. 

So the number one thing that changes when clients are working with me is that it doesn’t matter, like I said, when they get paid, it matters how much is coming into the  household every single month. How much does it take to run your household? That’s the number. So if you’re listening to this episode and you’re like, “Keina, I’m so glad I found you. I’m so glad you’re talking about this.” I need you to know how much does it take to run  your household? That’s the number that you need to be looking for. And in addition to  how much it takes to run your household, I also need you to know how much money does our household bring in every single month. Right? So those are the two numbers  we need. How much does it take to run our household? And how much money are we  actually bringing in? Because we don’t want to know that you’re paid every single week. We don’t want to know that you’re paid every other week. We don’t want to know that  you’re paid once a month. I want to know how much money is coming into our household and how much money is going out of our household. So if we focus on how  much is coming into our household, if you get paid weekly, right, you’re going to take your annual salary, and I need you to just divide it by 12. You could also just take one week and multiply it by four. I know that some weeks you’re going to get five paychecks, but you should listen to my episode about what to do with the extra paycheck, okay? Because I even have a way for you to think about that, but sometimes if you get paid, every other week, you’re going to have a couple months where you get three  paychecks. That is not what we want to be paying attention to. We want to know,  basically for a four week month, how much money do you bring in? How much money  does your household bring in for the month? And that matters because your bills don’t  actually care when you get paid, right? You have rent, you have your mortgage, it’s due  at the same time every single month. You have utilities, your subscriptions, your car  insurance, they’re all monthly. So we need to know that we understand what has to,  what’s coming in and then what’s going out. So once you know your monthly household  number, you can actually start asking real questions, right? Let’s plug in our bills and  see how much is going out towards bills every single month. Like how does our monthly  income cover what we owe? What’s left after we cover what we owe, right, after we  cover our bills, after we think about our irregular bills, after we think about, the money 

that we need to save. Then what you have left over, you can call your day to day  spending. What I like to call your fun money or your Chuck E. Cheese tokens. That’s the  money that you can allocate towards eating out, you can allocate towards  entertainment and the things in your life that make things enjoyable. So when we’re  thinking about your household income, we want to know that your household income  has to fit into a bills bucket, it has to fit into a spending bucket and it has to fit into a  savings bucket. We should not have any money left over. If you as a household bring in  $15,000, I want to know how that $15,000 funds bills, spending and savings. So stop  saying you have money left over because you don’t. The reason you don’t have money  left over is because you are going to be planning for your spending, right? You’re going  to be planning for intentionally saving money because in the future it is going to help  you build a budgeting system that always takes care of you. And so those are the three  categories that are the foundation of getting you and your partner on the same page  about your finances. And none of that starts with when do you get paid? It starts with  how much do we bring in every single month? That’s what you need to know. 

So just to  get a little bit more practical, and I know I told you that like the pay date doesn’t matter. And that’s true when it  comes to building your overall budget. But what I want to share with you and what I  actually want you to hear is that your pay dates, they’re more so I would use those to think about when you are actually moving money? Right. When do I need to move  money to my bills account? When do I need to move money to my savings? They’re  more about coordination in between you and your partner. They should not dictate  how you’re spending money, if that makes sense. So let’s say that I have, ah, a set of  clients and they are on two different paycheck cycles. And let’s say that one of, one of the people in the relationship gets paid every first Friday and the first Friday and the third Friday. And the other person in the relationship, they may get paid the first Monday and the third Monday, something like that. I would choose two arbitrary dates and it  would be like the seventh and the 20th. And so I would have that couple make their  financial decisions on the 7th and the 20th. I would like look at the calendar to make sure, you know, do those dates pretty much flow that on the seventh of every single month, both of you guys have your paychecks in your bank accounts or in your joint bank accounts, because now we’re talking about, you know, we have half of the money that we actually need in order to fund, fund our bills for this month. And then I would go to the 20th because they’re, you know, it’s another arbitrary date. I know that nobody  necessarily gets paid on the 20th. Maybe some months it aligns. But that’s the number that we’re grounding in to make financial decisions together, to talk about when we want things to move because we’re just making sure that the money is actually in the  account. You might arbitrarily pick the 1st and the 15th. You might arbitrarily pick the 15th and the 30th. It doesn’t necessarily matter. The fact that we’re using the same dates each month are important. And we’re using the dates that make sense with that couple’s paycheck. If that couple was, one person was paid weekly and another person was paid bi-weekly, then I would still probably use something like the 15th and the 30th, because two Fridays would have hit before that other person was probably paid on the 15th. And so then I’d be like, okay, like now your paychecks actually match up. That’s  usually how I talk about. I’m like, okay, great your paychecks match up. And when I say  your paychecks match up, it means that, like, both of your paychecks are in the bank  account, and you can comfortably make money movement, but you’re not making  decisions in that moment because your budget is the thing that has helped you make decisions. This is just, like I said, an arbitrary date that allows you to know we have the full $7,500 that we’re expecting because we make $1,500 a month, and that is in our  bank accounts. And so, we ask on the 15th of every single month that our, our savings accounts, that it pools $1,000, maybe $1,500 of it goes to our spending account. Like,  that’s what we use the 15th of the month for, to just establish a rhythm for moving  money. 

So on those dates, I would encourage the clients to have a money date. So, like, actually checking in. Look what’s in the account. Confirm that the bills that we think are going out are actually going out. Is the money that we have designated to go out is  only that amount going out, or is there something different? We want to make sure, like I  said, that your savings has been funded. And this just creates a consistent rhythm for  that couple to be on the same page. It also creates a rhythm for them to start planning  ahead and say, you know, we’re meeting on the 15th, and we’re going to meet again on  the 30th. What’s coming up in between the 15th and the 30th? Is it funded? What do we  need to think about? Like, is everything going to be taken care of? But as you can tell,  we’re getting into a conversation here where we’re keeping a pulse on our numbers.  We’re not waiting until the end of the month. We’re not being driven by a paycheck  cycle. We are driving this conversation based off of two dates that we chose, but we’re  driving this conversation based off of our budget. And our budget is a list of decisions  that we make in advance about how we want our money to move. Right? If our money  needs to help us pay off debt, if our money needs to help us invest, if our money needs  to help us save, those are the decisions that we’re making in our budget. Our budget is  set up for that, and then we’re moving accordingly. 

So I want to come back to something that I said earlier, because I think it’s the real  heart of what I want this episode to be about. The goal, the thing that I work towards  with every single client is that I want to get you off that hamster wheel. I don’t want you to even be talking about your  payday. I want your March paycheck, paying April’s bills. I want your April’s paycheck to  be paying May’s bills. I want you to have enough cushion that a weird week, a missed paycheck, a random parking ticket, that it doesn’t make you go into a tailspin. I don’t  want that for you. And the way that you get there isn’t by restructuring your life around when you get paid. And it’s about getting clear on your monthly income. It’s about  getting clear on your monthly expenses and making intentional decisions about where every single dollar is going. So when couples come to me and say we can’t get on the  same page with money, what’s usually underneath that has nothing to do with  incompatibility. It’s the fact that they have never created a shared monthly picture of their finances to work from. And I would argue that having a third party to help you walk through that also means that, like, you guys aren’t at each other’s necks, you’re not at  each other’s throats, because you have someone who can be there, who’s a neutral  party that can advocate for partner A and can advocate for partner B. Because a lot of  the times what I see with couples is like, you guys are saying the same thing. It sounds  a little bit different to you, but you’re really saying the same thing. So let me, let me tell you what I hear you saying, and let’s make a picture for creating that life that you say  that you desire. Because I don’t want you to reacting to your paychecks. I want you guys to actually be able to talk about how you went on vacation and you didn’t fight about money and how it felt so good to have the money in the bank. I want you to be able to talk about, like, Keina, we just paid off a credit card together, and we’re paying off our next credit card. Keina, we just fully invested into our retirement accounts because we had extra money from paying off our debt. Like, those are the conversations I want you to have. And hiring me as a financial coach gets you closer to those conversations. 

So if  you and your partner are on different pay schedules and maybe it feels a little frantic, I want you to start with figuring out what’s your combined monthly income, right? So what are you bringing home every single month, and then add that together with the other person. The next thing I want you to do is I want you to get clear on what are all of your monthly expenses. Every bill, every subscription, every irregular expense, everything that makes you roll your eyes. Where are you putting that in your budget? And then you can look at what’s left and you can beef up your savings, you can  allocate that money for spending, you can allocate that money to accelerate your debt payoff, but you can think about the money that’s left over where do I want that to go? If  you go to my show notes, I’ll put my spending plan template in the show notes and it’s a great template for you to use with your partner. So that’s the foundation, because from there, like everything else is, including the logistics of when you want to move money, it  just becomes a lot cleaner. 

So that’s all I have for you today. I just try to make this like a really short and sweet  episode, but I want you to know that your pay schedule is not the problem. You want to know your monthly picture. That is your starting line. I want you to figure out what’s  coming in, build your budget around that number, and then let the paycheck timing be a  detail that you actually use to decide when you actually want to move money. Not making you feel like,” oh, my goodness, he needs to get another job because he’s not  paid on the 15th and 30th like I am.” 

So if this episode hit home for you, I want you to do  two things this week. I want you to sit down, figure out what that monthly number is, and  then secondly, I would invite you to apply for coaching. Like, you are not listening to this episode by chance. And it’s probably the thing that you need to just push you over the  top. So if you go to my website, you can go www.wealthovernow.com/appointment you can apply there, or 

you can go to my show notes and you can apply to work with me in my five month  coaching partnership. I have a 60 minute consult, we talk about what’s coming up for  you and then we dive into how I think I can help and support you. So thank you so  much for tuning in. Until next week, have a great week. 

Outro: Thank you so much for listening to money files. If you’re ready to take the next step to reach your financial goals, head to www.wealthovernow.com/appointment, and let’s get started.