going to monthly pay

lizsmum

In the next few months I will be moving from weekly pay to monthly pay and would like to know if anyone has any ideas on the best way to budget For the first two months I will receive an intrim payment every two weeks this will be deducted at the end of the month not sure if this is the correct place to post this

opinions4u

1. Build up some savings now to bridge the gap.

2. Divide your monthly pay into 5 weeks when you move on to it, not 4. Then you will always have money left over.

zxspeccy

Try and pay as many of your bills by Direct Debit and arrange for the payment dates to be on or just after your monthly payday. I've always been paid monthly, but recently went from being paid on the 18th of each month to the 25th, and was surprised how helpful most of the companies I spoke to were. For the first couple of months it is wise to keep close tabs on your bank account to ensure you don't go overdrawn.
You might need to have some cash saved to be on the safe side, just in case you need it during the transistion period.

innovate

zxspeccy wrote: »

Try and pay as many of your bills by Direct Debit and arrange for the payment dates to be on or just after your monthly payday.

Having your DDs going out on payday, or the day after, could lead to huge problems. If your pay is delayed for some reason, you could find yourself with an unauthorised overdraft, rejected DDs, and resulting charges.

If you must have your DDs so close to paypday, at least arrange for an overdraft that would cover all your DDs. And never use that overdraft for anything but a safety net for your DDs. Much safer though to leave a few days (at least 3, to allow for long weekends) between money arriving and your DDs

Gromitt

Maybe you'll find this strange, but most of my DDs are scheduled for a few days BEFORE I'm paid. I'm using TSB for my bills, so I get 3% on my salary for the month, then my DDs get taken, then my salary goes back in a few days later and my account is back to normal. I thought this way would maximise interest. It's a strict bill-only account, so no fear of spending any cash designated for bills.

innovate

Yeah but your DDs don't make you overdrawn, do they.

Gromitt

innovate wrote: »

Yeah but your DDs don't make you overdrawn, do they.

I don't see what your getting at. If your DDs make you overdrawn, you are surely spending more than you are earning.

I know what my DDs should be, I know what I'm going to spend in addition to that. So I just transfer the DD money to a seperate account so I don't spend it.

innovate

Gromitt wrote: »

I don't see what your getting at. If your DDs make you overdrawn, you are surely spending more than you are earning.

I know what my DDs should be, I know what I'm going to spend in addition to that. So I just transfer the DD money to a seperate account so I don't spend it.

Absolutely agree with you.

However....

I was responding to an earlier suggestion to set up DDs on payday, for someone who is struggling with their money to start with. I maintain that for them it wouldn't be a good idea to have the DDs going out on the same day as they expect money in (you just need to read all those cries for help when people got overdrawn "by mistake").

Hooloovoo

Gromitt wrote: »

Maybe you'll find this strange, but most of my DDs are scheduled for a few days BEFORE I'm paid. I'm using TSB for my bills, so I get 3% on my salary for the month, then my DDs get taken, then my salary goes back in a few days later and my account is back to normal. I thought this way would maximise interest. It's a strict bill-only account, so no fear of spending any cash designated for bills.

I agree that's the best way to do it for the best return. I used to do it that way myself back in the days when I had an interest paying current account.

But for the majority of people that method simply doesn't work, because for some reason most people seem to be incapable of not spending money in their account.

I've never understood why so many people seem to find it so hard to budget. I know what money is coming in each month, I know what money is going out each month. That's all I need to know. The actual dates of the transactions are irrelevant. It doesn't matter if I have a bill go out three weeks after pay day because as far as I'm concerned the money is already gone the day I get paid and therefore it doesn't get spent!

getmore4less

Make sure you have some buffer funds.

Lookat your spend profile

Most people have weekly, weekend, monthly quartery annual.

Weekly is usualy not that big an issue since all months are roughly the same and only a bit(2-3 days) bigger than a 4 week cycle so a weekly shop might have a day or two change.

monthly quarter, annual should already be planned and saved on a weekly basis.

What catches most people out is the weekend spends, some months(4-5) will have 5 weekend and the rest 4.

If you budget properly(ballanced over a year) you just have a cash flow issue and a saved up buffer is the best way to overcome this.