While Chelsea Jackson finished her Early Childhood Education degree at Georgia Gwinnett College in 2016, she took a job as a cashier at a local grocery store. The 23-year-old earned $9.25 an hour and was paid on a weekly basis, bringing in about $250 with each paycheck.
Getting paid on a weekly basis, she says, came with its own set of challenges. She needed to figure out how to save enough from each paycheck to cover bills due later in the month while also meeting her immediate needs (food, gas, etc.) at the same time.
“When you get paid weekly you don’t really have a snapshot of what your true income is because it’s gone so fast,” says Jackson, who now works as a first grade teacher. “It’s such a little amount, you really don’t see how much you make until the end of the month when you add up your paychecks.”
More than 30% of U.S. businesses pay workers on a weekly basis, according to the U.S. Bureau of Labor Statistics. Cashing a paycheck every week might sound like a great deal, but it can actually make budgeting for bills more challenging.
Exacerbating matters is the fact that workers who are paid weekly are already at a financial disadvantage, as they are more likely to earn less than their counterparts who are paid biweekly or monthly. Employees on weekly pay schedules earn an average of $18.62 per hour versus $24.81 (workers paid biweekly) and $28.45 (workers paid monthly), according to the BLS.
There are ways to adjust to a weekly pay schedule and still meet your financial obligations at the same time.
Here are some tips:
Change your bill due dates if you can
If you can, ask whatever entity is sending you a bill each month if you can move your due date to one that’s more convenient for your budgeting purposes.
“You kind of have to have one thing pushed back so it doesn’t hit you all at once,” says Shannon Arthur, 22, who receives a weekly paycheck as the assistant manager for a department store in Suwanee, Ga.
Arthur says her credit card bill comes during the second week on purpose. She called her credit card company to change the bill’s due date to better fit her payment schedule.
Work with your lenders when you can’t meet your due dates
If two bills overlap and there isn’t enough money in the bank for both, workers are left with a hard choice. Arthur found herself in that situation, and she knew she was going to be late paying her phone bill. She found that honesty worked in her favor.
“I just explained to [T-mobile] my situation,” she says. They allowed her to pay $20 of the bill that week, then pay the remainder the following week.
But she stresses making a good-faith effort to pay your bill on time if you’re going to ask for extra time as you’ll likely need to show you have a good payment history or the company may not allow you to pay later.
Save your “extra” check
When you’re paid weekly, you’ll have some months when you’ll receive five paychecks instead of four. “Those months should be used strategically,” says behavioral economist Richard Thaler.
He advises workers to budget based on receiving four paychecks each month and then use the the fifth, or “extra” paycheck to boost or address your financial goals.
“When it comes around, or if, perish the thought, there are outstanding credit card bills, pay them down,” says Thaler.
Chart your cash flow
Know exactly what money you have coming in and how much you have going out each month. Lauren J. Bauer, a financial adviser based in Greensboro, N.C., recommends creating a list of all of your bills. From there, calculate how much you need to withhold from each paycheck in order to cover those bills by their due date.
“It makes it easier than just writing down a total for all your bills and trying to get them paid when you think about it,” says Bauer. She says the chart makes it easy to see what you’ll spend by check, so that you know how much money you’ll have coming in and what you’re able to pay for that week.
Set aside money to cover bills in advance
“If you’re getting paid weekly, you need to develop a discipline to save for things that you pay for on a monthly basis,” says Peter Credon, a New York, N.Y.-based financial planner.
Jackson says she relied on a simple strategy to make sure her bills were paid on time. She strove to save up three months’ worth of expenses. Once her savings fund goal was met, rather than paying her bills with a bit of each paycheck, she used her savings to pay bills as they came. Then, she replenished some of the funds each time she was paid.
This strategy is all about taking back control of your budget.
“If you have enough money [set aside], you can prefund things in many aspects and have control,” Credon says. “You’re controlling your finances and how you spend your money.”
Set aside funds for emergency expenses
No matter how often you’re paid, you should build an emergency fund that holds enough money to cover about three to six months’ worth of your fixed expenses. It can help cover irregular or unexpected bills that don’t line up with your pay schedule, like an emergency dentist visit or a trip to the auto shop.
“The emergency fund helps keep you out of long-term debt,” says Credon. “Focus on building up a little more cash on the side to get yourself through the tougher times. He says you may even want to save a little more if you’re a shift worker and your hours fluctuate.
Keep your spending money in a separate account
An easy self-hack that helps combat overspending is to transfer funds you need to cover your expenses for the month to a designated checking account and restrict yourself to using only those funds each month. Automatically transfer the amount you wish to save to a separate savings account, so you’ll be less likely to spend it.
Putting the extra money in savings can help prevent you from getting used to a larger budget. It stops you from seeing you have more money in your budget for the next week and thinking you can overspend. You take that money out of the equation to keep your spending habits tamed.
Make partial bill payments with every paycheck
If you know the date and amount of an upcoming bill, you can get ready for the payment ahead of time to lessen your financial burden during the week when the bill arrives.
For example, let’s say your rent payment is $700 per month, but you receive only $400 per week. Each week, set aside $175 for your rent and reserve the leftover funds for other expenses.
This way, a large, recurring bill like a mortgage or student loan payment won’t eat up the majority of your paycheck the week the bill becomes due. Plus, you’ll already know you have the money to cover the bill.
Try not to splurge
When you’re paid weekly, you’re paid quite frequently, so it can be easy to feel like your next payday is right around the corner. But you may run out of money faster than you imagine. When Jackson was paid weekly, she was forced to be strict with herself because she wasn’t paid that much at a time.
“There were definitely weeks or months when I would splurge,” says Jackson. “Those six days [till the next paycheck] can feel like a really long time.”
Use apps to track your spending and saving
You can set bill reminders on your banking or budgeting applications to remind you when a bill will be due in the coming week or set alerts to let you know when you’re overspending in a category you’ve budgeted a limit for.
Jackson says she used the budgeting app Mint to reign in her spending on food since she realized she was overspending at the grocery store.
Don’t forget to check your credit report from time to time if you use credit cards or have loans you’re paying off. “If you’re paying your bills on time and promptly, you’re also building your credit score,” says Credon.
Keep your goals in mind
Admittedly, if you’re already struggling to live paycheck-to-paycheck, saving up can be tough, but it’s not impossible.
“Watching a budget isn’t fun because most people want to be able to do what they want when they want to,” adds Credon. He suggests building in some rewards — like getting to go on a date night once a month — to help stay on course. He says to think of longer-term goals to keep you going, like the ability to buy your own place or take a trip for a few weeks overseas.