Getting paid monthly can be both a blessing and also stress inducing. When getting paid once a month, you can pay all of your monthly expenses at once and hit your financial goals faster. On the other hand, it can be hard to make your money last to the end of the month.
So how do you plan your finances when getting paid monthly? Below are key tips on planning out your finances if you are getting paid once a month! But before we dive into our tips, let's discuss what jobs usually pay monthly.
What jobs get paid monthly?
Your employer may also decide on a monthly payment schedule due to cash flow and managing employee benefits.
So, what jobs get paid monthly? As mentioned before, there are more out there than we realize. Examples of jobs that get paid monthly include but are not limited to:
- Careers in public service such as a police officer or paramedic.
- Local government jobs such as working for the city or county where you live.
- Federal government jobs such as working for the FBI or Homeland Security.
- Lawyers and doctors that operate in private practice.
- Entrepreneurs who pay themselves after their monthly expenses.
Since most of the positions listed above are operating on what may be a strict budget, it makes sense that they would pay monthly instead of biweekly or bi-monthly. Even doctors, lawyers, and entrepreneurs work on budgets dependent on billing and invoicing.
7 Ways to plan your finances if you are getting paid monthly
If you are one of the lucky ones who's paid once a month, don't fret. You can make it work! And we are going to help you ease the pain of getting paid once a month with the tips below.
1. Add up all of your fixed and variable expenses
Make a list of all of your monthly expenses. First, list all your fixed expenses, such as rent and utilities. Then write out your variable expenses, such as groceries, gas, and entertainment.
If you're unsure of what costs to include, a great way to check is to go through your bank account statements for the last three months.
You can usually find a pattern within the previous month but pulling three months' worth of expenses can help you determine how much you are genuinely spending and in what categories. When you get paid once a month, it's important to know where every penny goes.
2. Make a monthly budget
The next step to making getting paid monthly work for you is to create a monthly budget. There are a few different ways you can create a budget. Here are a few popular methods to try:
Zero-based budgeting is when you assign every dollar a job and leave nothing to your imagination. A zero-based budget accounts for every dollar, whether you spend it on expenses, debt, or savings.
If you were to practice this budgeting method after you're paid once a month, you would proceed to put every dollar into a budget category. Every month the categories can change along with the amounts you have assigned.
It's all dependent on your expenses and lifestyle. You may find by giving every dollar a job, you have more money to spend than you initially thought.
50-30-20 budgeting method
If you don't feel like tracking your expenses to the penny, the 50-30-20 method might be for you. The 50-30-20 budget is a straightforward approach to tracking your finances.
Instead of dividing your spending into individual categories, you designate 50% of your income towards needs, 30% towards wants, and 20% towards savings or debt. You can focus on your overall financial health instead of chasing down every dollar spent.
Cash envelope system
Don't lose hope if zero-based budgeting seems too complicated and the 50-30-20 method is too lax. There is still the cash envelope method. After you pay your fixed expenses, divide up your remaining cash into different general categories and place it into an envelope with that category's name.
So instead of chasing down your debit card purchases, you rely on the cash on hand. It's hard to overspend and less work to account for.
3. Create a financial buffer
Stuff happens. Things like medical bills or vet expenses can pop up at the most inconvenient times. That's why it's essential to build up a cash reserve or designate sinking funds to help with these expenses.
Every paycheck, put aside a certain amount such as $25 to keep in your checking account so you have the cash to cover these unexpected expenses while not relying on a credit card. Creating a financial buffer when getting paid monthly is crucial to success.
4. Try to pay your bills ahead of time
If getting paid once a month still seems daunting to you, there's the option of paying ahead on your bills. I do this with some of my current fixed and variable expenses.
The more in advance I pay bills, the less likely I worry at the thought of my paycheck being late or if I have an unexpected expense. Check if any providers give a discount when paid in advance, like car insurance, and start from there.
5. Create space in your spending
Whenever you review your expenses for the month, always check to see if you can create wiggle room. The less you spend, the more money you have to put towards goals such as paying off debt or saving up for a vacation.
It also helps to have wiggle room for random treats, like getting a pedicure after work. What are some ways you can create space in your spending when you're paid once a month?
Cut out any subscriptions that are no longer serving you and call your bill providers to see about a discount. You could even pick up a side hustle you could do a few hours a week, like driving for rideshare.
6. Try different methods to be more frugal
Suppose you are still having trouble creating space in your budget or just looking for more, brainstorm ways to cut additional costs. For example, I have recently started having items I would typically pick up from Target shipped to my home.
I have a Target Red Card, which means I get 5% off and free shipping, so I now limit my time in stores. By limiting my time, I shop less. You could also plan meals based on sales, subscribe to ship and save services or utilize your library for free cultural passes.
7. Reassess your financial plan if needed
As many tips as we've shared, here's the last one we want you to remember. Practice makes perfect! You many not ace planning your finances if you're getting paid monthly on the first try. Or even the second or third.
Following a new financial plan takes time. Don't be afraid also to reassess your financial plan as needed. Sometimes, a specific budgeting method won't work for us, or some tips don't work. Be persistent, and don't give up.
Plan ahead if you are getting paid monthly!
The key to getting paid monthly is always to plan ahead. Things tend to take you less by surprise when you prepare for the month than if you were winging it.
Planning for the month when getting paid monthly also allows you to achieve your money goals faster and feel more confident.
Remember, you can stay on track with your finances even if you are getting paid once a month!