No matter what your financial goals might be — paying down student loans, saving for a new car or house, or just getting a better grip on spending — using the right budget strategy could help you get there.
For some individuals and households, a standard monthly budget might do the trick. But others may find they prefer the added control and flexibility a weekly budget template can offer. Tightening the timeframe could make it easier to notice if you’ve strayed off course with your spending, or to pivot your planning when an unexpected expense (good or bad) comes along.
Benefits of a Weekly Budget
If you think tracking your money with a monthly budget is a pain, the idea of putting even more effort into the process — and breaking it down by the week — may feel like overkill. But there could be some benefits to be had from the effort.
Here are a few pros and cons to consider:
Pro: More Flexibility
Life doesn’t always follow a schedule. A monthly budget can be a good fit for fixed expenses that are paid once a month (rent and car payments, student loan payments, etc.), or even quarterly or annual bills (insurance payments, subscriptions, and memberships). But other costs can be less predictable, such as dining out with friends, unexpected car repairs, clothing purchases; gifts; or an occasional massage or pedicure splurge.
Especially when it comes to discretionary expenses, using a weekly budget could help you spot when, where, and why you overspent in a certain category. And you can react more quickly to make changes to get back on track.
Pro: Tracking Fewer Transactions
If you sit down to review your spending every week, instead of just once a month, you may be able to run through your transactions more quickly. And the less time-consuming and tedious your budget routine is, the less annoying it may be — which might make it easier to stay with it.
Pro: Planning Around Paychecks
If, like most Americans, you’re paid every week or every other week — or your spouse is — a weekly or biweekly budget could offer more flexibility for saving and spending.
People who are paid weekly have some months with four paychecks and some months with five. Those who are paid every other week have some months with two paychecks and some months with three. A weekly budget could help pinpoint those extra paydays so you can take advantage of the opportunity to work on a short- or long-term goal. You might stockpile a few grocery-store staples that could help tide you over during leaner months, for example. Or you may want to set aside the money to build your emergency fund. Or you could use it to save for a wedding, honeymoon, or vacation.
Pro: Simplifying Savings
Switching to a budget that aligns with weekly or biweekly paydays also could make saving more manageable.
If you’re enrolled in a 401(k) or similar investment savings plan at work, you may already be making contributions each payday. You could do the same thing with your savings account, by using a direct deposit from your paycheck. Or you could set up automatic transfers and move money from your checking account to your savings account each week.
Keep in mind that the more interest you earn, the faster you can get to your goals. So you may want to spend some time shopping for an account that offers both a competitive interest rate and innovative ways to manage your finances.
With a SoFi Money® cash management account, for example, you can pay bills, use the “vaults” feature to designate money for various savings goals, and track your spending and savings with the SoFi app.
Con: Too Much Temptation
The added flexibility that can make a weekly budget appealing also could make it easier for some individuals and households to be tempted off course — especially when it comes to discretionary spending. Telling yourself that you’ll spend less “next week” to justify getting what you want right now could become a habit. An important part of successful budgeting is sticking to the budget.
With that in mind, you might want to tuck each week’s discretionary money into an envelope … and when it’s gone, it’s gone. Using a tracking app to keep track of your expenses on your phone or tablet also could help. The SoFi app allows users to quickly see how they’re doing with their savings and spending.
Recommended: Envelope Budgeting Method
Con: Weekly Check-ins Could Become Overwhelming
Taking the time each week to review your purchases and update your budget may not be realistic for some people. If finding time to check in with your budget each week feels too overwhelming you may want to try a bi-weekly or monthly approach.
Creating a Weekly Budget
Creating a budget — whether it’s set up to be weekly, biweekly, monthly, or a bit of a combo — can be a good way to get control of your finances. Here’s are some steps to setting up a weekly budget template:
Pull Together Your Paperwork
If you want your budget to be useful, it should be as accurate as possible. So you’ll probably want to pull together some paperwork to help get it right, including your most recent pay stubs, bank statements, utility bills, insurance bills, credit card bills and loan statements, and any other recurring bills you can think of. You may also find it helps to have tracked your spending (on paper or with an app) for a while before you sit down to create your budget. Or you may want to collect recent grocery store, drug store, and restaurant receipts to help you estimate those costs.
Calculate Your Weekly Income
Write down all your income sources for a month. (If you’re married, include your spouse’s income sources. If you’re a freelancer or your income is unpredictable, you may want to calculate the average over the past three or four months.) Find your take-home amount (what you get after taxes and other payroll deductions) and divide it by four.
Make a Realistic List of Your Expenses
Using a budgeting program, a spreadsheet, or maybe just a notebook, write down all your expenses for the month. It can help to break down those costs by categories, such as:
• Housing costs. Things like your rent or mortgage, utilities, or other expenses.
• Transportation. Costs like car payments, insurance, gas, and maintenance.
• Food and groceries.
• If you have children, costs like child care, tuition, activities, and more.
• Financial expenses, such as bank fees or taxes.
• Savings and investing. Contributions to 401(k) or IRA, emergency fund.
• Health Care. Prescriptions, dental care, co-pays, and more.
• Personal spending. Clothes, shoes, gym membership.
• Entertainment. Movies, special events, steaming services, books, and more.
Keep in mind that the categories you include in your budget will be influenced by your wants, needs, and spending habits.
You may decide you want to use a monthly budget for some expenses (utility bills and other fixed expenses) and a weekly budget for others (such as discretionary expenses, debt payments, and savings). But if you want to go weekly with everything, the math isn’t all that complicated. To convert monthly amounts into weekly amounts, multiply the monthly figure by 12 and then divide by 52.
Recommended: 5 Ways to Save Money on Food
Deduct Expenses from Income
Add up your weekly expenses and subtract that number from your weekly income. If you come out ahead, you could add more to your savings and investments, pay down debt even faster, or add more of a cushion to another category on your list. If you come out even, you may want to adjust your discretionary spending a bit, so an unexpected cost doesn’t throw you off track. And if you come out with a negative number, you may have to make some decisions about what costs you can cut or even get rid of.
Especially when you’re starting out, it may help to use a budget framework similar to the 50/30/20 rule, which suggests keeping essential costs to 50% or less, discretionary costs to 30% or less, and setting at least 20% aside for savings if you can. If your percentages are where you want them, you have a budget.
Test the Budget and Adjust
Once you have a budget you feel comfortable with, it’s time to test your new spending and savings strategy. You might decide to use a tracking app to see how you’re doing, but you also may benefit from actually sitting down to go over the numbers once a week. (This could be particularly helpful for married couples who are sharing a couples budget.)
If you spot any problem areas or realize you forgot something, you can always make adjustments. If something happens to change your income or expenses (a raise, a new job, a job loss, a big purchase, or a baby), you can adjust again. Don’t be discouraged if the budget you built doesn’t work out the first time you use it. You may have to develop new habits. Or you may need to get some help with ditching your debt or determining your financial goals.
Recommended: Building Flexibility Into a Budget
Setting up a weekly budget could make it easier to stay on top of your spending by streamlining the number of transactions you have to track and helping you spotlight any areas you may be overspending in. However, for some checking in and tracking your spending and transaction each week could become overwhelming.
Photo credit: iStock/Prostock-Studio
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