How to Create a Biweekly Budget

Quick Answer

To create a biweekly budget, list all your expenses and add them to a bill calendar. Then add up variable spending and set savings goals. Create a budget for each pay period of the month, and then track your progress.

Budgeting hologram over tablet.

A biweekly budget is a spending plan that allocates your income for spending and saving over a two-week period. If you're paid biweekly, a biweekly budget may be a good choice for you, as it will allow you to keep a close handle on your funds and stay on track toward your goals.

Since it's typical for many bills to be due on a monthly basis, it can take a little initial planning to get set up with a biweekly budget that covers all your expenses. Here's how to create a biweekly budget in six steps.

1. List All Your Expenses

Much like with a monthly budget, your first step in creating a budget is to take inventory of all your expenses. That includes your fixed expenses, such as rent or mortgage payments and all of your bills, as well as variable expenses, such as groceries, clothing and the like.

To create a list of all your expenses, consider printing out your bank or credit card statements. Your expenses might include things like:

  • Housing payments
  • Utility bills, including phone and internet bills
  • Insurance
  • Groceries
  • Clothing
  • Pet and child care
  • Health care
  • Transportation
  • Debt repayment

2. Tally Up Discretionary Spending

In addition to fixed expenses, find averages for your discretionary spending. Create categories for entertainment, retail, dining and other variable spending you do regularly.

If you've been spending freely without a budget, you might need to cut back in these areas in order to reach savings goals and avoid debt. For now, just get a clear picture of your baseline.

3. Create a Budget Calendar

The tricky part of managing biweekly paychecks is ensuring you're always on track to cover your expenses. To see what you're working with, add all of your fixed bills to a calendar. This will help you visualize when your bills fall and allocate your income accordingly.

If the majority of your fixed expenses fall at the same time, such as at the beginning or the end of the month, consider seeing whether the payee allows you to choose when payments are due. Adjusting even a couple of your payment due dates can make a big impact when it comes to spreading out your expenses.

Alternatively, you can allocate a portion of your funds in each of your paychecks to go toward expenses, even those that aren't due for multiple pay periods. An app like You Need a Budget (YNAB) can help you direct a portion of your pay to future goals. Another benefit of this approach is that you'll get ahead of your bills, and you won't find that you have drastically more or less spending money in certain pay periods than in others. That can make it easier to get into a sustainable spending-saving routine.

4. Find the Right Savings Ratio

A biweekly budget can help you manage your paychecks more efficiently, but only if you set yourself up to not just cover your expenses but set aside savings. If you treat saving as an afterthought, planning to direct money into your savings account only after you've covered your expenses and discretionary spending, you'll likely find you can't save as much as you need to to reach your goals.

One rule of thumb is to save 20% of your pay. Aim to be realistic and find a savings ratio that works well for you. Some savings goals you could consider working toward are investing for retirement, building an emergency fund and saving for a down payment on a house.

5. Create Two Biweekly Budgets

If you're divvying up your expenses and spending to be consistent throughout the month, you may only have to create one biweekly budget. But if you're covering different expenses in different periods, it's a necessary step.

In either case, start by reviewing your budget calendar. Determine what bills fall in what pay period, and allocate funds toward them accordingly. Even if you plan to handle many bills in the pay period in which they fall, big expenses like housing are often easier to manage when spread out over two pay periods.

Next, build your variable expenses and discretionary spending into your two biweekly budgets. If you've decided to spend $200 on dining out per month, for example, you could set a budget of $100 in the first pay period and $100 in the second. Use the same approach for all other categories in your budget, including saving.

6. Track Your Spending

After you've set up your budget, start using it. Be sure to track your expenses to stay on your budget. You can do this with a spreadsheet or even by hand, but the most efficient way tends to be using a budgeting app.

There are a number of different apps that work well depending on your spending and budgeting style. Check out Experian's best budgeting apps list or try a popular app such as PocketGuard.

Track Your Credit

Allocating money toward your expenses, wants and savings can take some thought when you're paid twice a month. To stay the course and avoid overspending, creating a biweekly budget and then tracking your progress is key.

In addition to setting yourself up with a strong budgeting plan, keep tabs on your credit. Check your credit score through Experian to see where you stand. Consider signing up for free credit monitoring to receive alerts to changes in your credit report and see how good credit habits pay off in real time.

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