Beware the December pay trap!

enthusiasticsaver

Cutting back on reciprocal gifts has changed Christmas for me for the better.  It has not only given me the gift of not having to buy gifts which may be not needed or wanted so saving me money but also time in not having to shop, wrap or deliver them.  It is mainly for the grandchildren we buy for now with just a few little gifts (from a wish list) for the closest family members. None for friends or extended family now. 

My November main pension day today and DHs tomorrow. Only gifts left to buy this month are for DH and he needs to buy mine. Wrapping starts in earnest today as I feel a cold coming on so am binning off my 5 mile hike today. 

EssexHebridean

mcpitman said:

Our works payday is normally 25th of every month.

Dec = 13th. I do wish they would stop doing this.

Doesn't bother me, but the "young un's" at work are already excited about it.

Feel free to extract the pertinent sections of text from the original post here to print and stick up in your works kitchen or similar if that might make them think!  Chances are a lot of them will have no dependents and no priority bills, but it's still going to give them a headache in January when they realise that their last pay packet now has to stretch 6 weeks, not 4.

I can understand a company that usually pays on the 25th saying that they will pay towards the beginning of Christmas week to ensure that if there are any problems or delays the money is there when needed, but nearly two weeks early is surely excessive! 

mcpitman

Hi @EssexHebridean - possibly a bit of a sweeping statement from me (about young un's), with todays automation and systems, surely employers could just pay on the last banking day (23rd or 22nd??).

For me, it just means I sweep them off into another account and don't put the money back them until normal payday.

I used to like it when I worked in Financial Services, they paid on the 15th of every month, so Xmas pay day never changed.

TheAble

Inevitably Christmas is a more expensive time. But if you've built up a nice cash reserve this early pay in December needn't be an issue - you just draw on your reserve to cover the additional spend and that sees you nicely through to your January pay packet. Stress-free indeed! 

EssexHebridean

Just had the discussion here about pay and agreed that mine for December will be done early as it's easier for my boss that way, so I've asked that I'm alerted to when it will be going in and I'll siphon it off into a savings account temporarily then do the allocation as usual on the first of January. All good! 

2Scratters

Its the first time I have come across this methodology. I too get paid early at Christmas.
I like the idea of moving the wage aside to another account till its normal due date. I will need to do this as I am likely to move the money into a savings account.
I am not knocking anyone who is is in the throws of sorting themselves out or just about managing. Just keep doing what you are doing to be DF. We are now in a fortunate position of being debt free. It has taken us over 20 years to get to this point. 

EssexHebridean

Congrats on being DF! 

anjyeah

Thank you for this reminder! 

I fell for this trap earlier in my career and thought it was a good idea. I think last year was the first year that I consciously decided not to touch any amount or hide it somewhere until the actual pay day. This year is a bit better as I think we're only getting paid 5 days early compared to previous years where it's like a week or two before the actual pay day. 

It also helps that I've managed to squirrel some funds for Christmas that doesn't touch any of my pay at present. 

MrFrugalFever

A very valid point raised, interestingly, I had been planning to do this a few days ago as my pay moves from 29th to 22nd Dec. Luckily, my pay for this month that I received on 29th Nov will last me til end of Jan so I will put Decembers pay all in to savings and draw a little bit at the end of Jan

Also, in case there is any doubt, if transferring to a savings account make sure it is an INSTANT ACCESS account. You don’t want to get caught out!

peb

Just bumping this as it's fallen off the first page.....