Understanding Your Paycheck Cycle – Bi-Weekly vs. Twice Monthly Paychecks

Money Files

This is the third episode of my podcast series about paychecks. Today, I discuss bi-weekly and twice-monthly pay cycles.

It doesn’t matter how you get paid; it matters how you think about and manage your money. Whether you get bi-weekly or twice-monthly paychecks, zero-based budgeting is essential. I provide a practical framework for calculating your monthly spending plan based on your pay schedule and how to account for extra income. Most importantly, I stress the importance of maintaining a consistent budgeting approach regardless of pay frequency so you can spend drama-free.

Following these strategies will build financial confidence and break the paycheck-to-paycheck cycle. Tune in to learn more about budgeting for your pay cycle and transforming the way you think about and manage your finances. 

Stay tuned for insights on these topics:

  • [02:30] Bi-weekly vs. twice monthly paycheck cycles
    • [04:10] The illusion of making less or more
  • [05:20] Zero-based budgeting for bi-weekly and twice monthly pay cycles
    • [07:25] Misconceptions about the 3rd paycheck
  • [10:58] Importance of a spending plan

Tune into this episode of Money Files to learn how to manage your finances with a bi-weekly or twice monthly pay cycle.

Are you ready to start asking for help with your finances? Apply to work with me, and let’s start working towards your financial goals.

IF YOU LOVED THIS CONVERSATION ON, UNDERSTANDING YOUR PAYCHECK CYCLE – BI-WEEKLY VS. TWICE MONTHLY PAYCHECKS, CHECK OUT MY EPISODE ON WHY YOU SHOULDN’T DEPEND ON PAYDAY!

Transcript for “Understanding Your Paycheck Cycle – Bi-Weekly vs. Twice Monthly Paychecks”

Intro: Hi and welcome to Money Files. I’m Keina Newell from Wealth Over Now. I work every day 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 we are in the middle of my paycheck series and as a W2 employee, I want to help you learn how to manage your money well and put yourself in a place where I think so many times when we think about managing our money well it’s like how much are we spending? I want to make sure that I’m saving money, I want to make sure that I’m paying off debt. But I also want you to have the basics for thinking about your pay stub and your paycheck because so much of where you are in terms of managing your finances starts there. Whenever I’m working with clients, I’m always like, alright, let me see your pay stub or especially when clients, when I’m noticing that there are fluctuations in their account or whatever that may be, like it comes back to what’s happening with your paycheck.

And I think we don’t think about looking at our paycheck all the time because of the fact that everything is electronic now. There are no like paper pay stubs necessarily that you’re getting each week, but if you haven’t listened to my series on building the habit of checking your pay stub or my podcast episode, you definitely should go back and listen to that. But this week in the paycheck series, what I am going to actually be talking about is something that I will tell anyone who tells me, like, but Keina, I get paid fill in the blank. I think that a common thought and misconception is that if you get paid biweekly or twice monthly or you only get paid monthly or you get paid weekly, it provides a different dopamine hit for people. And so I’ve had clients come to me and say like, I was really good at managing my money when I got paid weekly.

I was really good at managing my money when I get paid twice a month. And I want to help you be really good managing your money no matter the pay cycle that you’re in. So specifically today I want to talk to those of you who are paid biweekly and those of you who are paid twice monthly. So if you’re paid biweekly, what that means is you are paid every other week. And what you’ll experience is that there are 26 pay periods in the year. So in a 52 week cycle, there will be 26 pay periods. If you are paid twice monthly, you are going to be paid 24 times throughout the year, throughout our 52 weeks of the year. And generally it’ll be like you’re paid on the first and the 15th, the 15th and the 30th, the seventh and the 18th, whatever that looks like.

But you have a different cadence. And even as I’m talking to you right now, it’s like, well, what do I do if I’m paid twice monthly and then my spouse or my partner, if they’re paid biweekly or they’re only paid once a month, it doesn’t matter how you’re paid, it matters how you think about and manage your money. I work with clients, especially couples all the time where one partner might be paid on the 15th and they get their paycheck all at once and another partner is paid on the 15th and the 30th and so they’re trying to figure out what they should be doing with their money. And it comes back to how are you thinking about managing your money month to month? 

So as we think about being paid biweekly versus twice monthly, one of the things I want to talk to you about, especially I’ve had clients message me about this, especially when they’re changing jobs and this may be something that you’re going through, but maybe you’re going from being paid twice a month to being paid biweekly. And so one of the things that you may experience is that it may feel like you’re making less money because you’re going from getting paid 24 times throughout the year to being paid 26 times throughout the year. And so the reason that I want you to know that it may feel like you’re being paid less and I’m saying this, assuming that you’re making the same amount of money, is because your paycheck is now going to be split over 26 cycles instead of 24 cycles. 

And so that can be one of the things that can be notable when you switch from that different pay cycle just to know that it may feel like you’re making less money, but you’re not really making less money. It’s just coming to you at different times and in different increments. And on the flip side of that, if you are going from biweekly to being paid twice a month, so you’re going from a 26 paycheck cycle to a 24 paycheck cycle, it might feel like you’re making more because of the fact that now your paycheck is only split over 24 cycles versus 26 cycles, but it doesn’t matter how you’re paid. I want you to know it does not matter how you’re paid because of how I want you thinking about managing your money month to month.

So this comes back to my budgeting philosophy that I love, which is to create this zero based budget. I want you to always be doing the same thing with your paycheck regardless of how you’re paid. And so for you, what I want you to really sit down and do is say like, okay, this is how much money that I have coming in a month. If you are paid twice monthly, you’re going to take the amount of money that you make in one paycheck, you are going to multiply it by two and that is the amount that you are going to use to form your budget. If you’re like Keina, one paycheck is more than the other, then I want you to actually use the paycheck that is less money in the month and multiply that by two. And I want that to form your budget. The reason being is because then when you have “extra,” the extra $100, the extra $200 that maybe comes from a mileage reimbursement, whatever that looks like or some other overtime or opportunity that you have to earn a little bit more in your paycheck, you can think about that money separate from what actually kind of like flows into your account. 

So I have a lot of clients that they may get money for my mileage and I just say like, okay, let’s work off of the lower number. You get paid twice a month, but let’s work off of the number that’s lower. And then when you get your mileage reimbursement, if it’s an extra $300, $400, you can think about that very discreetly and think about how you want that to be able to push your financial goals forward. The other reason I like you to be thinking in that way is because if for some reason that mileage reimbursement goes away, or the opportunity to have overtime maybe isn’t available every month, you haven’t been using that money to calculate into your standard of living, you know that it’s extra and you’ve been thinking about that money as extra instead of thinking about that money as essential. 

If you are paid on a biweekly cycle, and those are for my people that are like, oh, I got an extra paycheck this month. No boo boo, you do not have an extra paycheck this month. How I want you to budget is I actually want you to take whatever one paycheck is, I want you to multiply it by two. And that’s how I want you to form your budget. But Keina, what about my three paycheck months? So your three paycheck month, I want you to do the same thing with that paycheck. What I teach my clients is I’m like, that’s not extra money because in a three paycheck month, you still have your expenses like gas, you still have your expenses, you have groceries, you have, if you’re getting your hair cut every other week, whatever that is. But just those, your discretionary spending like that is still true even in a three paycheck month. 

So I don’t want you to see your extra paycheck as extra. I want you to do the same thing with that paycheck. And the benefit of that third paycheck is one, you’re going to make sure that you still have the lifestyle that you want to have during the week, whatever that looks like in terms of like your discretionary spending. But then what’s also going to happen for things like your rent, your utilities, your car payment, that is going to be an opportunity for you to get half a payment ahead. And then when you hit the other third paycheck cycle in that same year, you are going to be a whole payment ahead for those categories within your spending. And that is going to help you get out of the paycheck to paycheck cycle, that is going to help you be in a position where you can put everything on auto-pay. That’s going to be helping you be in a position where you’re like, okay, I always have thousands of dollars in my account because of how I manage my money from month to month. 

And even without the third paycheck cycle, you can create that level of freedom within your accounts. But that’s one of the added bonuses of having that third paycheck cycle is that you start to build what I call a buffer in your account and you start to have confidence with how you’re spending your money. But one of the things that I will always caution people against is thinking that third paycheck is extra money because like I said, boo boo it is not extra money. And like I actually love working with people that when they start working with me, it’s going to be a three-paycheck month because it allows us to get out of that paycheck-to-paycheck cycle and it does give them a little bit of extra wiggle room within their accounts. And that 30 day transformation from them starting with me to them being 30 days in, feels really, really dramatic in a good way. 

And it helped, like if you’re someone who isn’t caught up on bills or you’re trying to get ahead or maybe you’ve never felt like you’ve had the freedom to do auto pay, like it can be revolutionary to work with me, especially when you’re in that three paycheck cycle and sometimes it comes within that first 30 days, sometimes it may be within the first three months that we’re working together. But what I’ve noticed with my clients when we have been working together, they’re on that biweekly pay cycle is they are able to see how that third paycheck is not extra money and it completely revolutionizes their life and their world and their being. 

So high level key points here is just like being able to think about like if you’re biweekly or you are twice monthly, guys it’s the same amount of money. It comes back to the foundational plan has to be that you have a plan for your money, you need to have a spending plan, what I call a budget. You need to map out how you desire to spend money month to month. And you have to think beyond just the bills that are in front of you. If you go to my show notes, I will make sure that I give you a copy of my spending plan template, but I don’t want you to get caught up in your pay cycle and you let your pay cycle be the thing that holds you back.

Pay cycles are just that. They’re just pay cycles. But you deciding how you want to spend money month to month is the thing that’s going to help you feel in control and help you learn how to manage what’s coming in and what’s going out and to help you feel more intentional about where your money is going. With my clients, I’m not changing their pay cycles at all, the only thing we’re doing is we’re going in and we’re creating a plan based off of how they want to spend money month to month. So if you are, like I said, someone who is paid twice monthly, you’re going to take whatever your paycheck is, you’re going to multiply that by two and that is how you’re going to create your budget. 

You can put this number into my spending plan template and then think about your numbers throughout the year and from month to month and create your zero base budget there. Remember I said if one of those paychecks is lower than the other, I would plan off of the lower paycheck. And then when you have a paycheck that is greater than what you anticipate, you can see that money as something that truly feels like extra to you. And you can use that to apply towards a goal, whether that be paying off debt or maybe it’s a goal of saving money, you can think about that very discreetly. And then if you are someone who’s paid biweekly, which means that you’re paid every other week and sometimes you have a third paycheck, I just want you to take your paycheck amount, multiply it by two, and that’s how I want you to create your budget. 

And then when you create your budget in that way on that third paycheck month, you’re going to do the same thing with your paycheck as you do with every other paycheck.

Because remember, you are still living life even though it is the three paycheck month. And so I think like those are the things, the common pitfalls that I see when people aren’t thinking about that money and it being a third “a free paycheck,” and people go wild and they’re like, oh, I’m going to start buying plane tickets with my third paycheck. No boo boo. You’re not. You are going to take that third paycheck and you’re going to use it in the same way that you use every other paycheck. What you’re going to do if you desire to buy plane tickets is you’re actually going to build that into your travel fund. And so you having a travel fund is going to allow you to buy the plane tickets. It’s not going to be dictated by the date in your pay cycle. 

Thank you so much for tuning in to this short and sweet episode this week. And if you found this episode valuable, I would love it if you shared it with a friend, share it on social media, tag me and if you want to take this work deeper, go to Wealthovernow.com/appointment and we can dive into this work together in my five month coaching partnership. So thank you so much and 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.

Recent Posts

Leave a Reply

Your email address will not be published. Required fields are marked *

Continue the conversation: Join the Wealth Over Now private Facebook community

This community is here to encourage and support you in having open and honest conversations about money so you can stop spinning your wheels and finally gain clarity and confidence with your finances.  

Join the newsletter