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8 Tips for Budgeting When You Earn an Hourly Paycheck

April 27, 2021

Everyone constantly reminds you of the importance of budgeting, but how are you supposed to do that when you’re an hourly employee who works a different amount every week? Ask a search engine that sees the future “how to calculate my paycheck hourly”? Ask your shift manager how many hours you’ll be scheduled for over the next three months, knowing full well they haven’t bothered to think that far ahead?

Budgeting on an hourly paycheck can be tricky, but it’s possible. Follow these tips to help you manage your money more efficiently:

Calculate Your Average Hourly Paycheck

Though you don’t have a consistent income, hopefully, it’s somewhat predictable. Most people plan their budgets according to how much money they rake in per month, so you can do something similar and calculate your average paycheck. Add up the number of hours you worked each month over the past several months — do at least six to be safe — and divide by six to get your average hours per month. Multiply the result by your hourly wage to calculate your average hourly paycheck.

For example, let’s say you have a part-time job and worked 120 hours in January, 130 hours in February, 110 hours in March, 100 hours in April, 135 hours in May, and 125 hours in June. That’s an average of 120 hours per month. Multiplied by the federal minimum wage, that’s about $870 per month before tax.

Estimate On the Lower Side

Though you should keep your average monthly income in mind, it’s best to plan your budget as if you’ll make less money that month than more. Save what you make from months when you work more hours to roll over toward the months when you work less. You could put yourself in a precarious position if you plan to have extra cash that you end up not making.

Calculate Your Monthly Expenses

Next, calculate how much you can expect to pay each month for rent, utilities, internet, transportation, insurance, groceries, and other bills. If there’s variation between months, do the same as above and calculate your average essential expenses. This number will give you an idea of what you owe and what you have leftover to save or put toward emergency costs.

Know What Your Pay Cycle Means

A critical aspect of budgeting is knowing when you get paid. There are four common kinds of pay schedules: monthly, semi-monthly, bi-weekly, and weekly. You will have two paydays per month under a semi-monthly cycle or a payday every other week (for a total of 26 paydays per year, instead of 24) under a bi-weekly cycle.

Your pay schedule is important because it affects how you pay your bills. If your rent and utilities are due on the last day of the month, but your paycheck doesn’t come in until the first day of the next, then you need to be sure you’ve saved enough from previous paychecks to cover the entire amount. Should your pay cycle not align with your bills’ due dates and you would be able to cover them if you were paid slightly earlier, you could use an app like Earnin to access your paycheck ahead of payday for hours you’ve already worked.

Get Ahead of Schedule

Though your shift manager may not plan as far ahead as you want them to, it’s still a good idea to get your schedule as soon as it’s out. You also don’t need to know when you work the next month as long as you know how much. Ask your manager for an idea of how many hours they plan to schedule you for. It never hurts to inquire, and if they can give you a ballpark, you can prepare some slight adjustments to your budget.

Figure Out Your Tax Rate

You don’t take home as much as you make — as you know, part of your paycheck goes toward taxes. Taxes vary by income level and your state, so use SmartAsset’s hourly paycheck tax calculator to determine how much you can expect to pay in taxes and budget accordingly.

Another reason to have an idea of your taxes beforehand is because, as an employee, your employer should deduct taxes from your paycheck before sending it over to you. You fill out a W-4 when starting a new job that your employer uses to calculate how much to withhold, so you want to fill it out accurately and avoid paying too much or too little.

Don’t Forget to Save

It’s not said often enough, but it’s true: saving is a privilege. Not everyone has the freedom to put aside money every paycheck, but it’s essential to save whatever you can. Pay your expenses, have a little fun each month, and remember to stash whatever is leftover in a savings account — anything, no matter how minor, is better than nothing.

Adjust As Necessary

No budget made with a fluctuating paycheck will be definite, so be prepared to make adjustments accordingly. Did an unexpected cost arise? Did you work overtime last week? Whether you make more or less money this month than last, don’t be so determined to stick to your original plan that it puts you in a tight spot.

Your income might fluctuate, but as long as you have an idea of how much you make each month and what your expenses will be, you can plan a solid budget that accounts for variations.


Daniel Norris on Unsplash

Please note, the material collected in this blog is for informational purposes only and is not intended to be relied upon as or construed as advice regarding any specific circumstances. Nor is it an endorsement of any organization or Services.

1Disclaimer: Lightning Speed may not be available to all Community Members. Cash Outs may take up to thirty minutes, actual transfer speeds will depend on your bank connection. Restrictions and/or third party fees may apply, see Earnin.com/TOS for details.

2Disclaimer: Balance Shield cash out is subject to your available earnings and daily pay period max. Other restrictions and/or third party fees may apply. For more information visit earnin.com/TOS.

3NO PURCHASE NECESSARY TO ENTER OR WIN. Must be 18 years of age or older and a legal resident of the U.S. or DC. Games begin each Sunday starting 12/6/20 at 9:01 p.m. ET and end the following Monday at 9:00 p.m. ET with the last Game ending 12/19/21. To download the App, view the Official Rules, odds disclosures, prize details, and alternate means of entry, visit https://www.earnin.com/wewin/. Void where prohibited. $10,000,000 grand prize payable over 29 years. Sponsor: Activehours, Inc. (d/b/a Earnin ®), 200 Portage Ave, Palo Alto, CA 94306.

4Disclaimer: Up to 2 days early is based on comparison with traditional banks. Exact timing is dependent on your employer's payroll policies. For more information on eligibility and requirements of Earnin Express, visit earnin.com/TOS.

5Source: Internal analysis conducted by Earnin on December 10, 2020.

1Restrictions on use of Services and/or third party fees may apply, see Earnin.com/ privacyandterms for details.

2Balance Shield cash out is subject to your available earnings and daily pay period max. Other restrictions and/or third party fees may apply. For more information visit Earnin.com/privacyandterms.

3Tip Yourself Account funds are held with Evolve Bank & Trust, Member FDIC and FDIC insured up to $250,000. Tip Yourself is a 0% APY and $0 monthly fee service. Other restrictions and/or third party fees may apply, see Earnin.com/privacyandterms for details.

1Lightning Speed may not be available to all Community Members. Cash Outs may take up to thirty minutes, actual transfer speeds will depend on your bank connection. Restrictions and/or third party fees may apply, see Earnin.com/TOS for details.

2Restrictions and/or third party fees may apply, see Earnin.com/TOS for details.

3Balance Shield cash out is subject to your available earnings and your daily pay period max. Other restrictions and/or third party fees may apply, see Earnin.com/TOS for details.

4NO PURCHASE NECESSARY TO ENTER OR WIN. Must be 18 years of age or older and a legal resident of the U.S. or DC. Games begin each Sunday starting 12/6/20 at 9:01 p.m. ET and end the following Monday at 9:00 p.m. ET with the last Game ending 12/19/21. To download the App, view the Official Rules, odds disclosures, prize details, and alternate means of entry, visit WeWin Game & Sweepstakes Official Rules. Void where prohibited. $10,000,000 grand prize payable over 29 years. Sponsor: Activehours, Inc. (d/b/a EarninⓇ), 200 Portage Ave, Palo Alto, CA 94306.

5Tip Yourself Account funds are held with Evolve Bank & Trust, Member FDIC and FDIC insured up to $250,000. Tip Yourself is a 0% Annual Percentage Yield and $0 monthly fee service. Your Tip Yourself Account and any Tip Jars are not Savings Accounts. For more information/details visit earnin.com/tos.

6Up to two days early is based on comparison with traditional banks. Exact timing is dependent on your employer’s payroll policies. For more information on eligibility and requirements of Earnin Express, visit earnin.com/tos.

7Your Max on Earnin Express is up to 80% of your payroll or $1000, whichever is less. The 80% is dependent on you routing your full paycheck to Earnin Express. For more information on eligibility and requirements of Earnin Express, visit earnin.com/TOS.

8By using Cash Back Rewards (powered by Empyr) you allow participating merchants and/or card networks details of your transactions. For more information, see Earnin.com/tos.

9Learn how we collect and use your information by visiting our Privacy Policy.

1Disclaimer: Restrictions and/or third party fees may apply, see earnin.com/tos for more details. Lightning Speed may not be available to all Community Members. Cash Outs may take up to thirty minutes, actual transfer speeds will depend on your bank connection.

2Disclaimer: Lightning Speed may not be available to all Community Members. Cash Outs may take up to thirty minutes, actual transfer speeds will depend on your bank connection. Restrictions and/or third party fees may apply, see Earnin.com/TOS for details

3Disclaimer: Community Member must have had at least 1 successful debit with Earnin. Limit to 1 Max Boost per pay period. A boost will not adjust a Community member's daily max. Restrictions may apply, see earnin.com/tos for more details

*Disclaimer: Balance Shield cash out is subject toyour available earnings and daily pay period max.Other restrictions and/or thirdparty fees may apply. For more information visit earnin.com/TOS

1Restrictions may apply, see earnin.com/tos for more details. Tip Yourself Account funds are held with Evolve Bank & Trust, member FDIC and FDIC insured up to $250,000. Tip Yourself is a 0% Annual Percentage Yield and $0 monthly fee service. Your Tip Yourself Account and any Tip Jars are not Savings Accounts. For more information/details visit earnin.com/tos

2Disclaimer: NO PURCHASE NECESSARY TO ENTER OR WIN. Must be 18 years of age or older and a legal resident of the U.S. or DC. Games begin each Sunday starting 12/6/20 at 9:01 p.m. ET and end the following Monday at 9:00 p.m. ET with the last Game ending 12/19/21. To download the App, view the Official Rules, odds disclosures, prize details, and alternate means of entry, visit https://www.earnin.com/wewin/game-rules/. Void where prohibited. $10,000,000 grand prize payable over 29 years. Sponsor: Activehours, Inc. (d/b/a Earnin), 200 Portage Ave, Palo Alto, CA 94306.

3Disclaimer: Restrictions Apply. See earnin.com/tos for more information

*Disclaimer: Up to 2 days early is based on comparison with traditional banks. Exact timing is dependent on your employer's payroll policies. For more information on eligibility and requirements of Earnin Express, visit earnin.com/TOS.

**Disclaimer: Restrictions and/or third party fees may apply, see earnin.com/tos for more details. Lightning Speed may not be available to all Community Members. Cash Outs may take up to thirty minutes, actual transfer speeds will depend on your bank connection.

*(*) Internal analysis conducted by Earnin in January 2021, represents total users who Cashed Out at least once from January 1 to December 31, 2020.

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