I loved being paid monthly. I know some people hate it because then they run out of money by pay day. A simple bit of budgeting or planning (whichever word you prefer to use) can help with that really (so long as you do have enough money to go around).
Since an internship when I was 20 (quite a few moons ago now!), I’ve been paid monthly. And I have loved it! Without even realizing it, this forced me to always be a month ahead. I would get paid on the last business day of the month, set aside some money for the next month’s spending, and then send the rest to whatever my current savings goal was. Now with being on semimonthly pay, I plan to use part of the first paycheck to cover the next month’s spending and then the second one to savings, so that if I don’t get the second paycheck, the next month is already covered.
The other way that I stay a month ahead is on my credit card. You know how you can charge money on your plastic and then not actually pay for the items until sometimes almost two months later? That’s not how I budget. I follow a similar methodology to YNAB in that the day the money is spent is the day it comes out of my budget. My checking account balance has enough money at all times to pay off all of my credit card balances, even the ones that haven’t seen a statement yet. There’s no looking around for where to get the money when the statement comes. It’s already there.
Once you’re a month ahead, finances are much less worrisome. It doesn’t matter whether you’re paid biweekly, weekly, monthly, semimonthly, or completely sporadically. You add up all the income you received in the month, send some to savings and set some aside for the next month’s spending, rinse and repeat.
My parents always taught me to use one paycheck to pay for some things and the other one to pay for other things and to always pay your credit card before the due date, as in a few days before was just fine. I tried that way for a while and I found it really stressful to always be pulling money out of savings to pay for things you hadn’t planned on when the credit card bill came, so now I do things this way. I budget a bit (but I’m not very hard on myself at all if I miss the target) and have the money to pay the credit card statements in my checking account long before they come due. It’s freeing!
Edited to add: I’ve gotten a fair number of comments in recent months asking if I budget. I wrote several detailed posts on this back in April 2012. I’m still using the same spreadsheet, but the numbers are a bit different.
Looking back at those posts made me realize that I don’t forecast for home maintenance or long-term car maintenance. I also don’t have a plan for what I’ll do to replace my car. My current assumption on the latter is that I’ll have the mortgage paid off then and will just sell some taxable investments. For home maintenance though? I’ve definitely had to do some replacing. Honestly, I just keep a larger cash buffer to help with that.
Readers, how do you pay your credit card bills? Are you more like me or my parents?