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help - calculating monthly income

2K views 10 replies 9 participants last post by  mopples 
#1 ·
Ok so I'm trying to figure out my budget once again to see where the leaks are etc. We get paid biweekly. To ensure I'm getting our income correct, as if I'm not it could really mess me up .... we both get paid biweekly (same week) .. so to get our monthly income I would take our biweekly pay x 26 weeks = ? .. then divide that by 12 .. right?? Is that how you do it? ....... also we pay our mortgage biweekly .. I would do the same calculation to figure out that figure too for monthly right ???
 
#2 ·
You could, but that's not a true monthly income...

The difference comes from how often you are paid. If you are paid every two weeks, you actually receive 26 paychecks a year. Occasionally there will be months where you receive three paychecks, because each month (other than Feb) is actually slightly longer than four weeks.

If you are paid twice a month like on the 1st and 15th then you would only be getting 24 paychecks, and each one would be slightly higher. In this case the math is: 30,000 / 24 = 1,250 per paycheck. 2 paychecks per month = $2500 per month.

If you are paid every other week, then the math is 30,000/26 = 1153.85 per paycheck, but you can't really do a monthly number. For example, March has 31 days, which is 4.43 weeks, which gives you a monthly pay of 2,555. But in months with 30 days it will only be $2,469.
 
#3 ·
DH gets paid biweekly. For a monthly budget, we just take all of the income that he gets every two paychecks as long as those dates are between the first and last day of the month.

If he gets paid the 5th and 19th of March, that's our monthly income for March. If you both get paid the same week but are being paid biweekly, then you need to add up the two amounts you get for that week. So if you get two paychecks the week of the 9th (coming up this Monday) and then two paychecks the week of the 23rd (two weeks from this Monday), that's all of your monthly income.

I would just add up how many amounts of income you receive between March 1st and the 31st and see what that is.
 
#4 ·
I agree about using what you are actually receiving in March for March's income. Because if you take your bi-weekly times 26 divide by 12 then you come up with an income amount that you are not fully receiving in that month. So, 2 months will have 3 paychecks and the rest will have 2 paychecks.
 
#6 ·
So you are saying to adjust our income each month depending on how many pays are in a month?
 
#7 · (Edited)
Ok .. so I think my budget has just been wrong all along UGH .. no wonder it's not working ... so if I go by that theory working on April's budget we get paid April 9th and 23th ... which budget covers the week of groceries up to the 10th? Is that from the March budget?

Or would I do my budget from April 9th to April 22nd .. right after one pay to the day before the next pay?
 
#8 ·
I use a spreadsheet which groups my paycheck and bills by the time period they are in. Then each spreadsheet is for a month with usually two lists. All of the bills have to be on one of the lists. I get grocery and gas allowances every paycheck.
If there are three paychecks in a month, the bills just get spread out differently. And I get an extra grocery and gas allowance.
If you are looking at the year for a savings goal or for an accurate look at what you make in a year, you need the formulas or the multiply by 26 number, but day to day, I use and would always use payperiods.
 
#9 ·
My husband gets paid every two weeks. I set the budget up using 2 paychecks per month. The two months that have 3 paychecks in, I still use the 2 paychecks base. Making the 2 extra paychecks for the year as a cushion in the checking account ( or you can use it for savings, or a emergency fund ).

The first paycheck of the month is used for any bills in the first half of the month. The second one, for the second half of course.
This works really well if you are current on all your bills.
I also don't figure any overtime as part of our base monthly budget.
For example this winter when he got OT money, we bought our wood for next winter, a used chainsaw, and a used generator. Things we need but don't have room in the regular monthly budget.

I track our bills in a notebook, one page for each month. This way I can look back a year ago for example, and see what other misc bills were due what month. For example I know that in May, both our 2 dogs are due for their tags, and any vet visits if needing a shot.

I also have another notebook currently tracking electric use, groceries, and gas for our vehicles. This really helps me keep track of our tight budget.

When I do the monthly budget I make a list of the bills and the dates they are due on. Then I put a 1 or a 2 next to them. 1 bills would have to be paid the first half of the month.
I take out a set amount each week for groceries, misc, and gas money. Lately I even have some left over at end of week. I use that for stockpiling when I find bargains.

Easiest way for me has been to write things down. Then I can see a pattern and follow what works for us.
Good luck :)
 
#11 ·
I get paid fortnightly (or bi-weekly) and all my bills get worked around my pay cycle. I have monthly and fortnightly bills.

Basically i have set up a spreadsheet where everything is listed. I have each column representing a pay cycle and the income and bills due in that cycle are listed in that particular column.

From top to bottom i have listed Income, bills then left over income. Left over income flows onto the next column to keep a buffer in the account for big bill fortnights where the bills are higher then the income.

It works really well for me and have it set up for the next few years to project my debt payments and savings.

If it helps, i can email you a copy.
 
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