How to budget when you get paid monthly

Are you hopeless with your monthly pay? Are you a spender, not a saver, and constantly caught short towards the end of the pay cycle? We’ve got tips to help you manage your money better.

1. Pay all your bills at the start

This can work for all your bills, not just the main ones like rent or mortgage payments. See if you can change the billing date on accounts like mobile phone bills. 

You’ll never get caught short with bills due at the end of the month or pay penalties because you don’t have enough money. Likewise, with topping up your bus card, or other ‘larger’ expenses. Get them out of the way early.

2. Set aside money for groceries.

Get into the habit of stockpiling the basics (think rice, canned tomatoes, frozen veges), so you know you’ve got backups and you won’t starve when money gets tight. Fill up the freezer with home-made frozen meals too.

3. Divide your money into weeks

Most monthly pays end up covering closer to five weeks, not four.

Once you’ve paid your bills and set aside food money for the month, work out how much you’ve got left across each of the weeks. Do a mini-budget for each week. If in doubt, take your weekly spend out in cash, and when it’s gone, it’s gone! Avoid dipping into the next week’s allocation.

4. Think about timing

If you need a beauty or dental appointment, avoid booking it for the day before you get paid. Likewise, don’t book multiple appointments across one month when they can be spread out. I often try to book one appointment each month.

5. Stockpile Christmas gifts

It’s so easy to get caught out with this one. Suddenly Christmas creeps up on you, and you’ve got to buy 20 gifts with just one month’s salary. Panic! 

Try to divide up the gifts over the next few months. Aim to buy a couple of gifts each pay cycle, to ease the strain of your final pay before Christmas.

6. Have an emergency fund

This can be a really hard habit to get into if you’re a spender not a saver, but it’s really important. 

An emergency fund can keep you out of a bad debt cycle. After all, nearly five weeks can be a really long time to wait for a cash injection if you end up with a hefty unexpected bill, like a car, medical or vet bill. If it seems unachievable, start putting just a small amount aside.

7. Learn to say no

Sticking to a budget successfully means you might have to say no from time to time. Let your friends know you’re trying to improve your financial habits (I know, this might be a bit embarrassing). 

Get them to let you know a bit in advance of weekends away, birthday parties, or expensive nights out on the town. That way, you can plan your budget accordingly. But you still might have to say no from time to time - you can’t do everything!

8. Ask for help

Ask your colleagues, friends and even your employer for tips for managing money when you get paid monthly. 

Money’s not often talked about, so you might be surprised at how many secret money whizzes you work with! They might have systems that you can adopt. And don’t forget, you can always see a financial adviser or budgeting specialist if you’re feeling stuck.

Published September 2018

All content is correct at time of publication date. This article is general in nature only and has not taken into account any particular person’s objectives or circumstances. We recommend you speak with a financial adviser.