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Strategies to Save

11 Tips for Budgeting Monthly Bills on a Weekly Paycheck

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

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 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.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Brittney Laryea
Brittney Laryea |

Brittney Laryea is a writer at MagnifyMoney. You can email Brittney at brittney@magnifymoney.com

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Strategies to Save

Where People Save the Most: Super Saving Metros

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Give credit to the residents of Dubuque, Iowa. They saved their pennies last year, according to a recent study by MagnifyMoney.

Dubuque earned the highest Saving Score in MagnifyMoney’s Super Saving Metros report, which looks at the savings habits of residents living in the biggest metropolitan areas across the United States.

Relying on data from the IRS and U.S. Census Bureau, MagnifyMoney created a Saving Score for nearly 400 U.S. metropolitan areas. This score reveals:

  • Which areas boasted the greatest percentage of adults who earned money from interest-bearing vehicles, such as savings accounts and certificates of deposit (CDs)
  • How much interest on average these residents claimed on their 2017 tax returns
  • What percent of their annual income came from interest

We’ve changed our study a bit this year. Instead of looking at cities with populations larger than 25,000, as we have in the past, this year we are looking at savings within entire metropolitan statistical areas. These areas often include several cities and provide a more accurate look at the savings habits of residents within a larger area.

One of our key findings? As a nation, the U.S. doesn’t have a lot of savers. Nationally, 28.3% of U.S. residents who filed income tax returns in 2017 earned interest income on their savings. This interest income averaged $554, equal to 0.76% of filers’ total income for the year.

Not all metro areas are created equal when it comes to savers, though. In Naples, Fla., for instance, filers reported an average of $3,224 of interest income on their taxes last year. But in Pittsfield, Mass., that average was a far lower $481.

There are also significant differences among metropolitan areas in how many residents earn enough interest from their savings to report to the IRS. Filers who earn more than $10 of interest on savings accounts, CDs, money market accounts, high-yield checking accounts or certain types of taxable bonds have to report their interest income. MagnifyMoney found that in Peoria, Ill., 48% of filers reported interest income on their returns. But in Los Angeles, just 30% did.

Key findings

  • Dubuque pulled down the top savings spot among the 381 U.S. metropolitan areas that MagnifyMoney studied. The city had the highest Saving Score, an impressive 97.8 out of a possible 100.
  • Naples, which came in second with a Saving Score of 97, topped the country with the highest amount of average interest income per return, a strong $3,224. Naples also ranked first in highest percentage of interest income compared to total income. Filers here earned an average of 2.33% of their total annual incomes from interest on their savings.
  • Peoria had the highest percentage of filers who earned at least some interest income. About half of the federal tax returns filed here last year had some amount of interest income.
  • Iowa might have been the thriftiest state in the country in 2017. Dubuque notched the highest Saving Score in this year’s study. But the cities of Cedar Falls and Cedar Rapids also earned high scores. This isn’t a one-time fluke either. MagnifyMoney found a similar trend when looking at the numbers from earlier tax years.

What does the Saving Score measure?

It can be challenging to determine how much the residents of a particular metropolitan area are saving. For our study, we crafted a Metro Saving Score that relies on data from the IRS and U.S. Census Bureau for 381 metropolitan areas across the country.

We looked at three key factors to calculate our score:

  • The percentage of all tax returns that declared interest income
  • The percentage of residents’ total annual income that came from interest earned from savings
  • The average interest income recorded on tax returns in a metropolitan area

50 cities with the top Saving Scores


Dubuque led our list of the metro areas with the biggest savers, earning a healthy Saving Score of 97.8. But what’s so special about Dubuque?

The area isn’t especially rich: The U.S. Census Bureau reported that the median household income stood at $56,154 in 2016 in Dubuque County and $48,021 in the city of Dubuque itself. That’s below the median annual household income of the U.S. as a whole, which was $57,617 in 2016. The Census Bureau also said 16.8% of the city’s residents lived in poverty, while 29.7% of residents have earned a bachelor’s degree or higher.

Regardless of the relatively modest incomes here, 44% of tax filers in the Dubuque metro area claimed interest income on their returns. This interest income averaged $781 per return, which accounted for an average of 1.24% of these residents’ annual income.

So why the high savings rate? Maybe it’s the low unemployment rate. The Bureau of Labor Statistics said the unemployment rate in Dubuque was a low 2.2% as of August 2018. It’s easier to save when you’re employed. Also, it’s not that expensive to live in Dubuque. The Census Bureau said the median costs for owners with a mortgage is $1,102 a month, while the median cost for renters is $728 a month.

Things are a bit different in Naples, where the Census Bureau said the annual median income was $84,830 in 2016. It’s important to note that median income isn’t the same as average income. The median is the dollar amount that half of all residents in an area earn less than each year and half earn more. In Naples, half of all households reported an annual income of less than $84,830, while half reported an annual income higher than that.

What is clear, though, is that the residents of this Florida city have more money to save, which might be why Naples ranked second with a Saving Score of 97. Here, 36% of income tax returns included interest income. The interest income per return in Naples was high, too, leading our survey with a hefty $3,224.

In Fairfield County, Conn., which came in third with a Saving Score of 96.3, 36% of tax returns recorded interest income. The interest claimed here was sizable, too, with an average of $2,434 claimed per return. Again, the residents here have more money to save, with the Census Bureau reporting a median household income of $86,670 in 2016.

Santa Barbara, Calif., and Boston rounded out the top five metro areas on our list. Santa Barbara earned a Saving Score of 95.7, with 36% of tax returns here claiming interest income. This income accounted for 1.18% of annual income earned by residents here. The interest income per return in Santa Barbara was a healthy $1,074.

And in Boston, with its Saving Score of 94.2, 37% of returns claimed interest income, with an average per return of $920.

10 cities with the most savers

Dubuque again represented itself well on our list of metropolitan areas with the most savers. But it didn’t top it. The No. 1 spot went to another Midwestern city, Peoria, where 48% of tax returns listed some form of interest income.

What makes Peoria residents such good savers? It’s hard to say. The income here isn’t sky-high, with the Census Bureau stating that the median household income stood at $46,547 in 2016. At the same time, though, it’s not expensive to live in Peoria, freeing up residents to save. The Census Bureau said it cost $1,200 a month for owners with a mortgage, while the median value of a home was $127,200. Those who rented didn’t pay too much, either, with the Census Bureau reporting a median gross rent of $746 a month.

Then there is Dubuque. Again, the income here wasn’t high, but housing isn’t overly expensive, perhaps making it easier for residents to save. The Census Bureau reported that owners with a mortgage paid a median value of $1,102 a month, while those who rented paid a median of $728 a month. Maybe that’s why Dubuque tied for second with 44% of returns claiming interest income.

Dubuque tied for this spot with Ithaca, N.Y., where the same percentage — 44% — of returns claimed interest income. It’s not easy determining how Ithaca residents were able to save so much. The Census Bureau reported that the median annual household income here was just $30,291 in 2016, while 44.8% of the people lived in poverty. At the same time, the median value of owner-occupied homes stood at a fairly high $219,100. This makes Ithaca’s high savings rate a bit of a mystery.

Appleton, Wis., is easier to explain. This area ranked fourth on our list with 42% of returns claiming interest income in 2017. This isn’t surprising: The Census Bureau said the median household income here was $53,878 in 2016, while the median value of owner-occupied homes was a fairly low $137,800. Perhaps residents spent less on housing costs and were able to save more.

Iowa City, Iowa, finished fifth on our list, tied with Appleton with 42% of returns claiming interest income. That percentage was a popular one, with Rochester, N.Y., and yet another Iowa city — Cedar Falls — tying with Appleton and Iowa City.

10 cities that earned the most interest income

Here is a not-so-shocking fact: People who make more money tend to save more of it. That’s proven by our list of metro areas in which taxpayers claimed the most interest on their returns.

Look at Naples. Those living here earned a lot of interest income in 2017. According to our research, the average return filed here in 2017 listed a whopping $3,224 in interest income. That easily topped our list. The reason is fairly obvious: A lot of wealthy people live here.

The city is a costly one, with the Census Bureau showing that the median home value is $770,000, while it costs owners with a mortgage a median $2,987 a month. With those barriers to entry, it’s not surprising that the median household income was $84,830 in 2016. When you earn more, it’s easier to save more — a lesson made clear in Naples.

Fairfield County was second on this list, with the average tax return listing interest income of $2,434 in 2017. Again, this is another high-income area, with the Census Bureau reporting that the median household income was $86,670 in 2016.

Next on our list is Vero Beach, Fla., where the average interest income reported on tax returns stood at a healthy $1,839. This city is a bit more puzzling: The Census Bureau showed that the median household income was a modest $38,405 in 2016. And it’s not particularly cheap to live here, with the Census Bureau stating the median costs for owners with mortgages as $1,654, while monthly rent stands at a median of $829.

Coming in fourth on our list is another Florida tourist metro, Fort Myers, where the average interest income per return was $1,195. This is an interesting place: In the city of Fort Myers, with a population of almost 80,000, the median household income is $38,971. But if you focus on the smaller area of Fort Myers Beach, where the population is just more than 7,000, the median household income is $59,416.

The New York City metro area claimed the fifth spot on this list, with an average interest income of $1,146 reported per return. With a population of more than 8.6 million, New York City itself sees a wide range of yearly incomes. The median household income is $55,191, but plenty of households saw a far higher income than that. This helps explain the Big Apple’s high spot on this list.

10 cities with the lowest Saving Scores

While there are plenty of metro areas where people are saving, there are others that have earned low Saving Scores from our research. In most of these areas, the median household income is low. In others, unemployment is high.

This isn’t surprising: It’s a challenge to save when you don’t make enough and you’re struggling to find a job.

The first metro area on our list of areas with the lowest Saving Scores — Hinesville, Ga. — earned a Saving Score of just 0.5, with 15% of income tax returns filed in 2017 claiming interest income. The average filer here claimed just $80 worth of interest on their returns.

The median household income stood at $42,949 in 2016, according to the Census Bureau. That is below the median household income for the U.S., which the Census Bureau said was $57,617 in 2016.
El Centro, Calif., ranks high on this list, too, coming in second. Unemployment is a problem here, with the Federal Reserve Bank showing the rate at a high 17.2% in El Centro as of August 2018.

Third on our list was Fayetteville, N.C., earning a Saving Score of 1.8. Only 18% of tax returns here claimed interest income in 2017, with the average return listing just $149 in interest income. The median household income was $43,882 in 2016, while 18.4% of the population lived in poverty. The Census Bureau also reported that 14.2% of the people younger than 65 do not have health insurance, a factor that could account for the low savings rate here.

Pine Bluff, Ark., scored a low 3.0 Saving Score with 19% of income tax returns claiming interest income. Pine Bluff’s population is declining, falling to 42,984 in 2017, a drop from 49,083 in 2010 — a dip of 12.4%. At the same time, the median household income was just $30,942 in 2016, while 32.5% of residents lived in poverty.

Rounding out the bottom five of savers was the metropolitan area of Florence, S.C., with a Savings Score of 3.7. Just 17% of returns here claimed interest income in 2017. The median household income here was not terrible, but at $44,989 is still below the median for the U.S.

How to save more money

Need to increase your savings rate? There’s no secret formula. Start with crafting a household budget. List the income that comes into your household each month and the money you spend during the same time. Include both fixed expenses such as your monthly rent, mortgage payment, auto payment or student loan payments while estimating those that vary each month, such as your utility bills, transportation costs and grocery bills. Make sure to also budget for discretionary expenses such as eating out and entertainment.

This budget will tell you how much you should have at the end of the month for savings. If you don’t have much, or if you are spending more than you are earning, you’ll need to cut back on whatever expenses you can. This might require slashing your spending at the supermarket or cutting back on restaurant meals.

Be sure to start an emergency fund, too. You use the dollars in this fund to pay for any unexpected expenses that pop up, such as a busted water heater or blown transmission on your car. If you have this fund built up, you won’t have to resort to paying for these emergencies with a credit card, something that will build up your debt and make it even more difficult to save.

It’s important to note, too, that it might be a bit easier now to earn interest on your savings. That’s because as the Federal Reserve raises its benchmark interest rate, banks and credit unions are starting to do the same, boosting the interest rates attached to their savings accounts and CDs. These rates might still be small, but they are set to improve, so now is a great time to begin saving those dollars.

Methodology

To rank cities, MagnifyMoney created a Saving Score on a scale of 0 to 100 that included three equally weighted components:

  1. How broadly individuals in the metro saved (measured by the percentage of all tax returns that declared interest income, ranked by percentile).
  2. The metro’s dedication to saving regardless of their income (measured by the percentage of total income that came from interest, ranked by percentile).
  3. The absolute magnitude of savings in the metro (measured by the average interest income per tax return, ranked by percentile).

MagnifyMoney measured these factors using anonymized data from tax returns filed with the IRS from Jan. 1 to Dec. 31, 2017.

To be counted as a saving household, the taxpayer must declare interest income using Form 1099 on their 2016 tax returns. Filers who earned over $10 in interest on savings and investments, including a high-yield checking or savings account, a CD, a money market account or certain types of taxable bonds, should have received a copy of 1099-INT, which reflects interest income reported by financial institutions to the IRS.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Dan Rafter
Dan Rafter |

Dan Rafter is a writer at MagnifyMoney. You can email Dan here

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