These days twenty-somethings switch jobs frequently, are self-employed with irregular pay schedules or frequently unemployed.
Having a fail-safe from possible financial destruction is always needed!
I started Half Now and Half Later Budgeting after switching jobs a couple of times and noticing that the 3-week lull between my checks would leave me credit card dependent.
A BIG NO-NO in my book.
Adding to that my checks would be eaten up every time I paid rent so the last week of the month I would eat ramen and rice daily.
Half Now and Half Later Budgeting deemed HN|HL is one of the best budgets for your twenties!
Simply putting away half payments of your bills every paycheck keeps a nice bank buffer in your account and allows you to live like a normal human being for the whole month instead of just half of it.
The HN|HL budget is great for
- Beginner budgeters
- Paycheck to paycheckers
- If you never seem to have enough money to pay bills
- If bigger bills, such as rent, take out more than 1/2 of your 2-week paycheck
- You like simple budgeting. Period.
Keep reading to find out 4 reasons why HN|HL is Bae!
4 Reasons Why HN|HL Budgeting is Bae
1 | Budget Without Effort
HN|HL budgeting is one of the easiest budgets to start. Just divide every bill you have in half and set aside that amount on your first paycheck and then pay the other half or all of it on your second paycheck.
Half paying ensures you will have at least half of whatever payment you need to make in the bank or already paid which then allows you some extra wiggle room in life. If I ever lost my job and couldn’t pay rent I’d be happier giving the rent office half of the payment then none of it.
Half payments are like a small insurance you have for yourself. Another great thing about it is if you do ever have an emergency you would have a nice chunk of money set aside and wouldn’t have to completely depend on your credit card. ( Although Emergency Funds can help with that! )
2 | Gain a Realistic View of Your Budget
When you start the HN|HL budget you will have less money to spend week to week but you will have the same amount overall it’s just moved around. This helped me realize a lot of my budgeting mistakes like letting my rent taking most of my two-week check or having too many bills due on one paycheck.
When I noticed that all my bills were due at the beginning of the month, I called and asked them to move my bill due dates so things were even. After becoming more responsible with my credit use, I now place all my bills on my cards and pay the cards twice a month.
Once you start the HN|HL budget you will be able to see:
- How much big bills eat up your budget
- If your bill due dates are way too close together! Move those suckers around! Call every company you have a bill with and ask them to change your due date. Move some next to your first paycheck and the others next to your second. This may be slightly annoying depending on biller, but after that initial call you won’t have to touch it again.
- The beauty of a credit card. BUT DON’T YOU ABUSE IT! You can have all your bills go through the credit card and pay off half of it every paycheck. Pay your bills and build your credit!
- You gotta say no to the 50 things your friends want to do every weekend. Tell them your bank account and ReEducated Rizzy said no!
- You start saving up for the things you want to do. $50 across two paychecks is better than $100 from one check.
3 | Conquer Your Giant Payments
With the HN|HL method big expenses instantly go to half their size.
That looming $700 rent payment looking to eat up most of your paycheck comes down to only $350 a check.
Leaving a lot of breathing room for other things you need to get done!
When I first started the HN|HL method I split everything in half and paid it out as the checks came.
Later on, I took out the smaller payments like internet and phone and made sure I paid those in full on the first check.
With my bigger payments such as rent, car note, student loans, and sink funds –I use the HN|HL method. Now I can’t imagine paying my rent any other way!
4 | Decrease Interest On Your Debt
Try the half payment method for a few months and then go check your car note or student loans. You will see the stark difference in how much interest is paid.
Banks love to put you on an automatic payment plan because they know you will save on interest if you pay every two weeks instead of every month.
- Did you enroll in automatic payments to start an account or save a few percentage points of interest? -Call back in 6 months and ask them to remove the automatic monthly payment, you will still keep your interest rate.
- Love automatic payments? Set them up for twice a month (or weekly!) through your online banking by bill pay or payment transfer.
Say no to extra interest! Stop letting those dollars slip through the cracks.
How to HN|HL Budget:
- Make a list of all your bills and divide them in half
- Add up all the half payments
- Subtract the half payments total from your 1st check of the month
- Pay your bills in full on your 2nd check of the month
Told you that was easy! 😉
To make it even easier, get the HN|HL budgeting worksheet below and add your monthly payments to the last column. Everything will be slashed in half and added together automagically, so you can see what you are working with immediately.
Two Types of HN|HL Budgeting
Full HN|HL budget
The full HN|HL budget is great for learning how to spend your money better.
- Provides discipline without the extra effort of other types of budgeting.
- Great for people who like to make consistent payments instead of fluctuating.
Partial HN|HL budget (The method I prefer)
The partial HN|HL method only halves the big expenses for the month.
- Allows you to pay small expenses like $10 Netflix in full on one check.
- Requires a tad bit more discipline, as the money fluctuations, can make you feel you can spend more one week to the next.
** I recommend only paying bills under $50 in full.
Pick the one that best fits your needs!
Evaluate the ReEducation:
- HN|HL budgeting is Bae.
- Hack up those BIG payments to make them easier to digest.
- Always do half payments on your credit cards or loans.
- Try both HN|HL methods to see which one better fits your needs. Preview both with my HN|HL worksheets.
- Keep reading the Financial Literacy Series for even more financial ReEducation.
Thanks for reading! Do you think the HN|HL budget is for you? Which method do you prefer? Subscribe to get new post sent right to your inbox and comment below!