Somehow, it’s become customary for bills to arrive in the mail once a month while our paychecks are issued every two weeks. This creates a bit of a mismatch and a challenge when trying to set up and stick to a regular budget.
But there is a positive side to this situation — you can use your bi-weekly pay schedule to build in an automatic savings plan for yourself. The key is to plan your budgeting around your two bi-weekly paychecks instead of a monthly bill cycle.
In other words, if you get paid $1,500 every other Friday, set your budget for $3,000 per month, allocating that amount for your monthly expenses. That way, you’ll end up with an extra two paychecks each year. You can use that extra money to fund a retirement account, pay for unexpected expenses, or anything else you want.
Enrolling your loans in a bi-weekly payment plan is another way to simplify your budgeting by aligning your bill schedule with your pay schedule. It takes all of the work out of setting up a bi-weekly payment plan. AutoPayPlus will debit your account every two weeks for half your regular monthly loan payment amount. By the end of the year you’ll have made one extra loan payment, which will lower your interest charges and help you pay off your debt sooner. Plus you’ll have the convenience of our online member portal where you can keep track of all your bills and payments.
Having bill payments automated will also help you protect your credit since timeliness of loan payments comprises more than one-third of your FICO credit score. You’ll also avoid the penalties and fees that result from late payments. With AutoPayPlus, you can just set it and forget it, and relax knowing that your bills will be paid on time every time.
So use your bi-weekly paychecks to help automate your budgeting and savings, pay down your debt quicker, reduce interest and protect your credit in the process. Check out our online loan savings calculator to see just how much of a difference biweekly payments can make for you.