When you are putting together your budget for the month, the first thing that goes at the top is your total income.  If you have a job that pays you twice a month or if you have irregular income (self-employed), this is a number that can be unpredictable from month-to-month.  This puts you in a position of living paycheck to paycheck.  Instead of worrying about if you will have enough for all of your expenses, or if you timed your bill payments correctly to not overdraft, let me share with you my secret to never worrying about payday…. EVER AGAIN.

My first “grown-up” job only paid me once a month, and I wouldn’t receive my first paycheck until a month after I started working (I started July 1 and didn’t receive my paycheck for July until August 31).  This seemed extremely bad for financial planning, we were completely stressed out by it, and I had never heard of, nor experienced it before.  Thankfully, what we thought was a huge inconvenience, actually turned out to be the biggest blessing for our budget.

To be worry free when setting up your monthly budget, you need to be living a month behind.

In the month of May, you should actually be living on the paychecks you received in April.

This is it, this is the secret to not ever worrying about payday ever again.  Live on last month’s paychecks.

My husband and I have been doing this for years, and we don’t even know when our paydays are because they don’t matter. It is so freeing!

Why is living on last month’s paycheck so beneficial?

No matter how good of a budgeter/planner you are, things will always come up during the month that isn’t expected.  When you live on last month’s paycheck, you know before the month begins exactly the amount of “income” you have to work with, down to the cent.  There is no excuse for going over-budget because you already know what you have to work with.

You should be writing out next month’s budget a few days before the month starts, having a meeting with your spouse and finalizing your spending for the upcoming month.  There will be no question of your total income so there will be no question of what you can spend your money on that month.

When you live on last month’s paychecks, you are guaranteed to never overdraft.  When you have last month’s paycheck in your checking account (currently living off of it), your current paychecks for the month are still coming into your checking account.  Even though you aren’t spending next month’s money yet, it is a great feeling to have paychecks coming in, beefing up your checking account and providing a buffer.

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With the cushion of having additional paychecks coming into your checking account throughout the month, you don’t ever have to worry about when you schedule bill pay for your utilities, internet, cable, etc.  You already have all of the money available (last month’s paycheck), and you have the buffer of the current month’s paychecks entering your checking account throughout the month.

Another bonus to living on last month’s paycheck is the security it can provide if an emergency comes up.  If a job is lost unexpectedly or an injury sustained that prevents you from working, you will at least have a one-month buffer already built in.  In theory, you would never touch the current month’s paychecks until the next month, but if you absolutely had to live without a continued income, you could at least survive one month.  Always knowing this buffer exists will provide a sense of security for you, which will improve your stress level when it comes to your finances.

If you want to stop stressing about what your income will be for the month, and if you will have enough for your budget, you need to live a month behind.  Once you start doing this there will be no question of how much money you have for the month’s expenses, you will never overdraft, and you will have the piece of mind knowing you have one month’s income in savings.

I promise this will change your life.  I thought this was such an absurd idea until we started doing it, and now I can’t even fathom how people live paycheck to paycheck, and budget appropriately.  If you are currently budgeting paycheck to paycheck, imagine not having to worry about when payday is.  I absolutely want you to budget, but I want it to be a stress-free process for you so you stick with it and enjoy the process!

If you want to get started living on last month’s paycheck, check out this post to learn the steps to make it happen!

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