YNAB is set up monthly, because, generally it is the way most of us think about paying our bills. But the truth of the matter is, many of you are not paid monthly. I know this because you ask us (a lot!) about what to do if you are paid every two weeks/once a week/every other week/every day/etc.
What if you were like me, in high school, when I made balloon animals for people at restaurants and got paid in tips every day? (Yes, I really did this. And you know what? It paid pretty well and taught me how to talk to people.) What do you do then?
Don’t worry, I will not say you have to budget every day. Because that would be annoying.
What Does This Money Have To Do Before You Get Paid Again?
For all of us, no matter the frequency of our income, there is a balance between the effort and the return. At some point, there will be a point of diminishing returns. And we don’t want that.
So back to our original question: how do you budget if you get paid every day?
I want you to try not to worry about your paycheck cycle. When you get paid is not the point. You need to decide on a frequency that works for you. If you get paid every day, maybe you say, “Ok, on Saturdays, I’m going to add everything up and record it and budget that money.” The most crucial question in this process—and frankly, this is true whenever any of us is budgeting—is: What does this money need to do before I’m paid again?
It’s Not About Frequency, It’s About Accountability
If you are paid every day and have decided to budget once a week, you should be asking, “What does this money have to do before my next budget meeting?” And you just follow that frequency.
There is a fantastic book called The Four Disciplines of Execution. I’ve had a lot of my team read it. I love it. One of the four disciplines is what they call a “Cadence of Accountability.” If it is too infrequent, you aren’t accountable; and if it is too frequent the returns drop significantly as well. You want to find the right rhythm.
It is different depending on the circumstances, of course, but weekly is good if you are paid every day. And for those who get paid twice a month, every other week is great. And if you are very experienced, monthly works too.
If you are just getting started do it every week. Get into that rhythm and you’ll find, over time, you don’t need the cadence to be so intense. Unless you are really focused, and really going after your debt or some big goal, in which case, you might want to keep that weekly rhythm to stay focused.
Just. Keep. Budgeting.
Whether you are paid every day or once every three months, just be sure to have a regular budgeting cadence, where you are holding yourself accountable, and asking, “What does this money have to do before I’m paid again?”
You want to keep your money lined up with your priorities, because that, my budgeting friends, is the secret sauce.