Delineate fixed and variable monthly expenses, dividing them weekly for clarity. Strategically allocate funds from the first paycheck to cover essential bills. Stay flexible with variable expenses, utilising budgeting apps. Communicate openly with creditors if needed. Gradually build a financial buffer for resilience against income fluctuations and unforeseen expenses.
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“I recently started a new temporary job at a fairly decent company, but one of the issues I’m having with budgeting for it is that it’s paid monthly. At first, I figured that I could just set aside the money and have the weekly amounts paid into my main account, but now I’m running into the problem that there is a month and a half until I get my first full month’s paycheck, and the set-aside money from my first paycheck won’t be enough to budget out the month until the full one. I can survive all right in the meantime, thankfully, due to Studylink living payments, but I would love some advice on organizing my budgeting line.”
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Understanding Monthly Expenses:
Create a comprehensive list of both fixed and variable monthly expenses. Fixed expenses include rent or mortgage, utilities, insurance, and any loan payments. Variable expenses encompass groceries, transportation, entertainment, and other discretionary spending. To adapt to a monthly pay cycle, divide these costs into weekly amounts by dividing them by four. This breakdown will provide a clearer picture of how much money you need each week to cover your monthly obligations.
Strategic Use of Set-Aside Money:
Take a strategic approach to the money set aside from your first paycheck. Since there’s a gap until you receive a full month’s pay, allocate these funds judiciously across the upcoming weeks. Prioritise essential expenses such as rent, utilities, and other non-negotiable bills. By doing this, you ensure that the critical aspects of your budget are covered first, easing the financial strain during the transition.
Flexible Budgeting and Communication:
Recognise that variable expenses can fluctuate, so remain flexible throughout the month. If you overspend in one week, look for opportunities to cut back in the following week. Budgeting apps can be valuable tools to track your spending and identify areas for adjustment. Additionally, if you anticipate challenges meeting specific payments, don’t hesitate to communicate with creditors or service providers. Many are willing to work with you and may offer flexibility in payment schedules to accommodate your temporary financial situation.
Building a Financial Buffer:
As you receive subsequent paychecks, gradually build a financial buffer to mitigate future challenges. Consider allocating a portion of each paycheck to a separate savings account or emergency fund. This fund can serve as a safety net for unexpected expenses or emergencies, providing financial stability during times of irregular income. Building this buffer is a proactive step towards financial resilience and can help smooth out the impact of any future disruptions or changes in income.
Hope this helps.
Regards, Clive Fernandes (Financial Adviser)
Director – National Capital
Disclosure: I am the director of National Capital, a KiwiSaver advice firm. The views expressed in this article are the views of the author. The information provided is of a general nature and is not intended to be personalised financial advice. You may seek appropriate financial advice from a Financial Adviser to suit your individual circumstances or contact National Capital.
