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How to Budget Fortnightly When Your Bills Are Monthly

Fortnightly pay and monthly bills do not line up neatly. Here is how to convert your bills to a fortnightly amount, why some months have three paydays, and when to plan by due date instead.

If you are paid fortnightly, your money arrives every two weeks. Rent or mortgage, phone, internet and many other bills often run monthly. Some bills come quarterly, and a few only once a year. Getting those different rhythms to line up is one of the most common reasons a fortnightly budget feels harder than it should.

The fix is not complicated. It mostly comes down to converting your bills into a fortnightly amount, and keeping an eye on due dates.

Why a month is not exactly two fortnights

A fortnightly pay cycle usually gives you 26 pays a year. Twelve months with two pays each only accounts for 24 of them. The other two pays land in months that end up with three paydays. Which months those are depends on your pay dates.

Because 26 fortnights is 364 days, slightly less than a year, pay dates gradually shift. The ATO notes that a financial year sometimes has 27 fortnightly pays instead of 26.

Those three-pay months are not extra money. They are part of your normal yearly income arriving on a different schedule. If your budget assumes every month has two pays, the third pay is what quietly covers the gap. Decide in your own plan what that pay is for, rather than treating it as a bonus by default.

The problem with just halving monthly bills

A common shortcut is to take a monthly bill and divide it by two. It feels simple, but it does not match how often you are paid.

Halving sets aside more than the bill needs over a year, which can make your budget look tighter than it really is. The opposite mistake, assuming each month only has two pays of income, makes it look tighter too. Converting everything to the same fortnightly basis gives you a fairer picture.

How to convert bills to a fortnightly amount

Work out the yearly cost, then divide by 26:

• Weekly bill: weekly amount × 52 ÷ 26 (the same as weekly × 2)
• Monthly bill: monthly amount × 12 ÷ 26
• Quarterly bill: quarterly amount × 4 ÷ 26
• Annual bill: annual amount ÷ 26

Example figures only. Fortnightly amounts are rounded to the nearest cent.

Moneysmart's free budget planner lets you enter each item with its own payment frequency (weekly, fortnightly, monthly, quarterly or annually) and converts them for you, which can be a handy cross-check.

A practical fortnightly budget, step by step

1. Start with your take-home pay per fortnight. Use the amount that actually lands in your account. If your pay varies, Moneysmart suggests working from an average.
2. List your fixed bills. Rent or mortgage, utilities, phone, internet, insurance, loan repayments and anything else you pay on a schedule. The household bills checklist can help you catch the ones that are easy to forget.
3. Convert them to fortnightly amounts where that is useful, using the method above.
4. Add everyday spending. Groceries, fuel or transport, and other day-to-day costs, as a fortnightly amount.
5. Include irregular expenses. Rego, school costs, car servicing and similar. Our guide on how to budget for annual bills walks through how much to set aside.
6. Decide on savings contributions. Choose an amount that works for you, even if it is small to start.
7. Compare planned with actual spending. At the end of each fortnight, check what you actually spent against your plan.
8. Review after a few pay cycles. Adjust amounts that were too high or too low. Moneysmart recommends updating your budget when your income, bills or goals change.

When due dates matter more than averages

Converting bills to a fortnightly average shows what they cost you over a year. It does not tell you whether the money will be there on the day a bill is due.

For example, if rent comes out on the 1st of the month and your pays land on the 2nd and 16th, the fortnightly average works out over the year, but you still need the full month's rent ready before the next pay arrives. In those cases it helps to plan by due date as well: look at which bills fall between this payday and the next, and make sure this pay can cover them. Setting money aside into a separate bills account each payday is one way some households smooth this out.

If that is the part you are trying to solve, the free Payday Check looks at one pay at a time and what it needs to cover. Payday Buffer does the same for every payday, including upcoming bills by their due date.

A free spreadsheet set up for fortnightly pay

If you want somewhere to put all of this, the free Money Detective budget spreadsheet starts on a fortnightly pay cycle (you can switch to weekly, four-weekly or monthly). You add your take-home pay, bills, everyday spending and savings for the pay period, then record what you actually spent. The dashboard shows planned against actual for each category. You enter the fortnightly amounts yourself, so the conversions above are a useful first step.

Official sources and further reading

This article provides general information only. It does not take into account your personal objectives, financial situation or needs, and it is not financial advice. Money Detective's tools provide estimates and planning information. Consider your own circumstances, and seek independent advice if you need it, before making financial decisions.