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tmma248's picture Todd Macaulay, CFP®
College or Department
Financial Well-Being
1080 Export St, Suite 280
Phone Number
(859) 218-1589
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As human beings, our nearly universal reaction to change is to resist. Some early adapters come around more quickly than the rest of us and appear to embrace change. But they too may admit that if nothing changed, parts of life would be easier. We like predictability and the perceived safety that predictability provides.

The schedule for how we are paid is fairly arbitrary. I worked for six different companies before coming to UK, in both non-exempt and exempt positions, and each company had a different pay cycle. Biweekly, bimonthly, monthly, fortnightly (what is a fortnight anyway?) - these different pay cycles are not better or worse, just different. I was still getting paid the agreed upon salary, provided I worked the agreed upon hours. It was just divided up differently.

Most recently, employees across the country are faced with changes in how they are paid because of the changes to Fair Labor Standards Act. This type of top down change is a federal law, after all, and is often met with the most resistance.

The FLSA will impact UK employees and their financial well-being in a variety of ways. Primarily, I want to address how to adapt your budget when moving from a monthly to biweekly pay schedule.

This transition will be easiest for employees that already have a month of income set aside and are not spending more than their currently monthly cash flow. In this "nirvana" of personal finance, the timing of when you are paid is less important. Some months, those that you receive two biweekly checks, your balance will decline slightly. Two months a year you will receive three checks and the balance will jump back up. For those of us, and we are many, who have not reached this enviable position, spending habits may need to be adjusted slightly.

The bottom line is that moving from monthly to biweekly you will be getting paid more frequently, but in smaller amounts. This means the money for all of your monthly bills will not hit your account at once and you will need set aside money to cover bills that occur during the two-week period after each check.

When starting a budget, I suggest people list out the bills that they pay regularly starting from the 1st of the month and continuing in chronological order. This step remains unchanged for both monthly and biweekly budgets. Here is an example of how this may look in an Excel spreadsheet.

Non-monthly bills is a category created by taking all of the bills you pay at other intervals, semiannually or annually, and calculating how much to set aside for those bills each month. Typically these are insurance or tax payments, but it really could be any recurring bill that is not monthly. You could also set aside money for these bills every biweekly paycheck. You would want to divide the annual amount by 26 to use this approach. To adjust this budget for a biweekly paycheck we need to add the pay dates for the month. In December, UK biweekly pay dates will be Dec. 16 and Dec. 30. This information needs to be added to our spreadsheet.

So it looks like this. In this example, pay from November will need to cover the bills before the 16th of the month since that is the first pay date of December. Money from the 16th needs to be set aside to cover bills between the 16th and the 30th. This process would be repeated so that pay received on the 30th of December would cover the expenses in the next month before the first biweekly check in January.

When January rolls around, I like to create another tab in the spreadsheet, copy over my bills and add the pay dates for January. This process is easy to repeat and keeps things from getting overly complicated. You can find the framework for the budgeting sheet I use below. UK Financial Well-Being is here to help UK employees make this a smooth financial transition. Please email me at or call me at 859-218-1589 if there is anything else I can do to help.