Another benefit of having a weekly budget is making weekly, rather than monthly, credit card debt payments or savings contributions. Doing this can actually save you (or earn you) additional interest. Although the amounts are generally small, weekly contributions are also helpful psychologically, as you can begin to see your continuing progress towards your financial goals that much sooner.
How to create and use a weekly budget
Sometimes breaking down monthly fixed expenses into weekly amounts can be a little annoying, but doing so can be a good exercise in seeing where your money actually goes. If you’re paid weekly or bi-weekly, breaking monthly bills into weekly amounts can also help you set aside funds from each paycheck to go where they’re supposed to.
Just in case you forgot the shortcut for changing monthly amounts into weekly amounts, multiply the monthly figure by 12 and divide by 52.
Even if you don’t break down your regularly occurring monthly bills, you need to break down the money you have left, after your monthly bills, debt repayment, and savings. This is the money you spend on everything from food to gas to entertainment. After all, these are the areas in which we are most likely to overspend.
There will be times when you’re going to go over an amount on your weekly budget. For example, if you only fill up your car three times a month, one fill up will be more than your weekly gas budget. That’s OK, as long as you subtract the difference from the following week. Similarly, you can roll over any money you don’t spend into the following week.
When you do this with a weekly budget, you begin to see very quickly how each purchase is a trade-off. Will you want a nice dinner this Friday, or a couple of take-out dinners next week? Do you want to drive down to see your friend 100 miles away this weekend or pop around town going shopping?
Summary
Budgeting is hard. But, cutting your large monthly budget down into a weekly, or even bi-weekly budget can show you just how much you spend in any given week and can make managing your money a little easier.
Do you budget weekly? How has it helped, and what have you found challenging about it?
This article was republished with permission from Money Under 30.
