The Pros And Cons Of Biweekly Pay - A Full Guide
When it comes to receiving our paycheck, most of us are adept at receiving it every month. But what if you’ve found yourself in a position where you’ve entered a job that pays biweekly? What does this even mean? Although this is not a particularly popular payment scheme, some businesses opt to pay their employees on a biweekly basis.
This essentially means that employees will be paid money into their account at two week intervals. This is, of course, far more frequent than regular monthly salaries. Biweekly pay means that you will essentially get 26 paychecks per year.
Some people love getting their pay at more regular intervals, whereas others find it inconvenient. To find out the pros and cons of biweekly pay, simply keep reading below, as we take a closer look.
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The Pros Of Biweekly Pay
In order to take a closer look at some of the benefits of biweekly pay, we’ve compiled a list of the key pros below. Simply keep reading to find out more.
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More Frequent Payments
One of the pros associated with biweekly pay is simply that you get paid on a more frequent basis. This is far better than being paid on a weekly basis, which many people are.
Those who are paid on a weekly basis simply aren’t able to pay their bills immediately, as they have to wait for a build up of cash coming from their salary. With biweekly payments however, it’s far easier to make larger payments immediately.
This can be highly beneficial, because those who are being paid on a weekly basis might see themselves incurring late charges from bill companies, who insist on being paid by a particular date.
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When people are paid on a monthly basis, this can make them far less frugal when it comes to managing their money. If they’re paid a lump sum at the beginning of a month, this might encourage them to overspend, leaving them with very little money, and essentially living from paycheck to paycheck.
But, if you’re paid on a biweekly basis, which is far less frequent, this can help people to be more discerning and disciplined about their spending habits. Because they know the money has to last them for the next two weeks, they’re able to keep a closer eye on their spending.
Being paid on a biweekly basis might actually encourage people to put away more savings. Because of the regular payment schedules, employees might be more adept at planning for the future, and saving for future healthcare expenses.
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The Cons Of Biweekly Pay
Now that we’ve taken a look at some of the positive aspects of biweekly paychecks, we can move on to take a closer look at some of the cons.
Biweekly payments won’t suit everyone, so to find out more about this payment method, keep reading below.
Difficult To Save For Trips
Biweekly pay can actually make things very difficult when it comes to saving money for trips and vacations. Because you’re required to wait two weeks in order to get your paycheck, there’s less money that you’re able to put away at once.
This can make it very difficult for employees to put away adequate amounts of money in order to enjoy their holiday time.
If this is something that you’ve been struggling with, we’d recommend that you speak directly with your manager. Some companies will be willing to give their employees one lump paycheck rather than two in these circumstances.
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Stress Due To Money Management
Although it has been shown in some cases that employees who are paid on a biweekly basis are often more adept at saving money, this comes with a lot of stress. It can be far harder to manage your expenses when you're paid at a more frequent rate.
This means that employees need to be incredibly frugal about all of their outgoings, which can prove to be somewhat exhausting. Some people might even struggle making ends meet, as they’re finding it difficult to manage their money.
This one follows on from our last point. Many employees who are paid biweekly might experience issues with budgeting.
If you are paid on a monthly basis, it is far easier to create a budget. All you have to do is subtract the money for rent and bills, and any savings, then you’re left with your budget for food and luxury items that month.
Those who are paid on a biweekly basis don’t have this same advantage, and it can be difficult to work out a monthly budget when you’re still waiting for an additional paycheck.
What Is The Difference Between Biweekly And Semi Monthly Pay?
For those of you who are reading this article, you might be wondering what the differences are between biweekly and semi-monthly payments. These two methods of payment are very similar, but there is one key difference.
Essentially, biweekly pay means that you’ll receive your paycheck once every two weeks. A semi-monthly pay, on the other hand, means that you’ll be paid twice a month.
Unlike biweekly payments, which are simply paid on the anniversary of your last paycheck, semi-monthly payments will have set dates during the month that are set aside for employees.
To sum up, there are several pros and cons associated with biweekly payments. Although it can encourage employees to be more frugal with money, it can also be stressful when it comes to budgeting and managing money.
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