I recently changed jobs – from a full time job to two part time jobs. Now, my pay schedule is going to be totally different than getting paid twice a month with the same amount each time. Now, I’ll be getting paid twice a month for one job and twice for another job – it’ll be more inconsistent and probably a little erratic.
My husband and I are wondering how to adjust our saving, the amount we keep in checking and how to make sure our bills hit at the right time. Or if there’s some sort of better strategy or specific way you recommend people plan for something a little more unconventional like having two part time jobs.
I hope I made sense! Thanks again for any help you can offer!
Hey Lauren, I understand your frustration. When and how often you get paid makes a big difference to your financial life. My wife and I went through a similar situation many years ago and it took us a while to adjust. Here are a few suggestions to help ease the transition.
When you get paid is actually kind of arbitrary (even though it doesn’t feel that way), especially if you are getting paid the same total amount. You could get paid once a year and still maintain the same lifestyle, problems only arise when you add in bills and behavior. Bills come on a set schedule, and moving paydays can result in missed payments and negative account balances. We are also balance spenders. Meaning we spend what we have. You may know you are getting paid around the same amount, but since your account is now getting a weekly shot of income it feels like you are getting paid more.
Here’s a chart to show your (made-up) income:
|Former Pay Schedule||New Pay Schedule|
For the month, you are still making $2k, it’s just coming at unfamiliar times. One way to deal with this issue is to just ignore the first and third payments. Wait until the second and fourth weeks to use the money when it’s “fully funded”.
You also mentioned you are potentially dealing with an erratic payment amount which I take to mean that instead of getting $500 a week you are getting anywhere from $400-600 (these are just example numbers). This makes budgeting very difficult.
Dealing with an erratic income is often called a variable or fluctuating income. I hate to be this guy, but the reality is you should buy my book The Commissioner when it comes out in January (you can preorder it here). Until the book is released, the 12 page workbook is available in our bookstore. If you haven’t heard of The Commissioner before let me explain the concept behind the book and workbook a bit. To oversimplify it, you either make the same amount every paycheck or you don’t. If you don’t, then you have a variable or fluctuating income. This causes a lot of budgeting problems. The best way to deal with this situation is to even out your income. I call it The Commissioner Pool.
Your two part time jobs are newer, so you may not have a solid idea of the average pay you’ll earn, but when you do, give yourself a salary. This salary will be less than what you make on a regular basis. When you get a paycheck, keep your self-appointed salary in your account and move the excess to another account, this other account houses your “pool.” When your paycheck is less than your self-appointed salary, move the difference from your separate account into your main account. Giving yourself a salary allows you to know exactly what you’ll be making each month, and the pool gives you a cushion for hard times. And bonus these will save you a ton of financial stress. This system works. But it does require living off of less than you make, which is a sacrifice many struggle to make.
Lauren, you brought up two really tough issues so I also talked about your situation this week on The Pete the Planner Radio Show on WIBC. Take a listen!
Peter Dunn a.k.a. Pete the Planner® is an award-winning financial mind and a former comedian. He’s a USA TODAY columnist, author of ten books, and is the host of the popular radio show and podcast, The Pete the Planner Show. Pete is considered one of the foremost experts on financial wellness in the world, but he’s just as likely to talk your ear off about bass fishing.