Beware the December pay trap!

EssexHebridean

kimwp said:

EssexHebridean said:

Both MrEH and I have now been paid. We’re both fully aware of the fact, so for us the money will be left sitting in the accounts it gets paid into but untouched, and ai will do the money shuffle to the right place for January DD’s some time between now and the 31st. For us this month pay was just about a week earlier than usual. 

The idea of manually moving money to pay dd's makes me nervous - if I forgot to move it or the DD amount got changed then the bills wouldn't get paid - why do you do it this way round?

Sorry Kim - only just discovered there are new posts on this thread!

I get paid into my own account, MrEH's goes into the joint account - two reasons, first it's a hangover from when I was self employed and needed my invoices to be paid somewhere separate for easy traceability. second, my pay date fluctuates as it's done manually so depends when MrBoss remembers to pay me! (Only within a few days, and I'm fine with it before anyone gets up in arms!) As a result I always transfer my share of the joint outgoings across to the joint account manually - my money pays the mid-month onwards stuff anyway, and becuase I have to do it monthly it's not something I'm going to forget! 

kimwp

EssexHebridean said:

kimwp said:

EssexHebridean said:

Both MrEH and I have now been paid. We’re both fully aware of the fact, so for us the money will be left sitting in the accounts it gets paid into but untouched, and ai will do the money shuffle to the right place for January DD’s some time between now and the 31st. For us this month pay was just about a week earlier than usual. 

The idea of manually moving money to pay dd's makes me nervous - if I forgot to move it or the DD amount got changed then the bills wouldn't get paid - why do you do it this way round?

Sorry Kim - only just discovered there are new posts on this thread!

I get paid into my own account, MrEH's goes into the joint account - two reasons, first it's a hangover from when I was self employed and needed my invoices to be paid somewhere separate for easy traceability. second, my pay date fluctuates as it's done manually so depends when MrBoss remembers to pay me! (Only within a few days, and I'm fine with it before anyone gets up in arms!) As a result I always transfer my share of the joint outgoings across to the joint account manually - my money pays the mid-month onwards stuff anyway, and becuase I have to do it monthly it's not something I'm going to forget! 

Thanks!

EssexHebridean

Aaannnndddd it's time for this one to bounce back into view again. 

Just a note - PLEASE, if you look at this and think "Well that's a bit obvious isn't it!" then please, scroll on by, this one's not for you. There really is no need for derisory or derogatory thread-spoiling comments. Genuine helpful suggestion and input very welcome - comments suggesting that anyone who falls-foul of this issue are stupid very much not. Just be kind, please. 

Rob5342

pelirocco said:

kimwp said:

EssexHebridean said:

Both MrEH and I have now been paid. We’re both fully aware of the fact, so for us the money will be left sitting in the accounts it gets paid into but untouched, and ai will do the money shuffle to the right place for January DD’s some time between now and the 31st. For us this month pay was just about a week earlier than usual. 

The idea of manually moving money to pay dd's makes me nervous - if I forgot to move it or the DD amount got changed then the bills wouldn't get paid - why do you do it this way round?

Have 2 accounts ,the account you get paid into pays all your bills and another account that you transfer money in to cover your other spends
So no need to " protect" early pay 

Even better is to have a Monzo or Starling account. Put the bills money into a bills pot/space s as soon as you get paid, and set all the direct debits to be paid out of that pot. Once you've done that divide the time until your next payday into 4 or 5 equal periods, and split the money you have into corresponding pots (eg £200 in a 4th January pot, £200 in a 12th January pot). The bills are all taken care of that way and all you have to do is make your current balance last until your next pot date, then empty that pot and make the balance last until the next etc.

That's how we do ours and we couln't be without it now. It's quite amazing than none of the other banks have implemented it yet.

kimwp

Rob5342 said:

pelirocco said:

kimwp said:

EssexHebridean said:

Both MrEH and I have now been paid. We’re both fully aware of the fact, so for us the money will be left sitting in the accounts it gets paid into but untouched, and ai will do the money shuffle to the right place for January DD’s some time between now and the 31st. For us this month pay was just about a week earlier than usual. 

The idea of manually moving money to pay dd's makes me nervous - if I forgot to move it or the DD amount got changed then the bills wouldn't get paid - why do you do it this way round?

Have 2 accounts ,the account you get paid into pays all your bills and another account that you transfer money in to cover your other spends
So no need to " protect" early pay 

Even better is to have a Monzo or Starling account. Put the bills money into a bills pot/space s as soon as you get paid, and set all the direct debits to be paid out of that pot. Once you've done that divide the time until your next payday into 4 or 5 equal periods, and split the money you have into corresponding pots (eg £200 in a 4th January pot, £200 in a 12th January pot). The bills are all taken care of that way and all you have to do is make your current balance last until your next pot date, then empty that pot and make the balance last until the next etc.

That's how we do ours and we couln't be without it now. It's quite amazing than none of the other banks have implemented it yet.

I agree with pelirocco. Obviously there may be reasons why you might do it the other way, but otherwise it doesn't seem sensible to break an automated process with a manual step - what if you are unwell, on holiday or just have too much to deal with at that time and don't remember to make the transaction - then your bills won't get paid.

Otherwise the pots idea sounds good. 

Singlespeeder

I'm with Rob .... it's seldom you're ever THAT ill you can't look at a banking app!

We're fortunate enough now to be able to work slightly differently, but still with a Starling account.
On Payday we move most of the money into the Starling account.
This sits with a base balance of £1000.  That £1000 is our zero. If there's less than £1000 we're effectively financing our own overdraft, but it allows for those potential sneaky payments we may not have thought about  (tbh these never happen as we have a strangle hold on our finances!).
So payday comes along and we dump our running costs into the account then divvy it up into the appropriate side accounts, Bills, Food, Annuals (the most important one imho) Diesel etc ....bringing the balance back to  £1000.
2nd of the month the £700 mortgage goes out of the £1000 and we replenish it from the Mortgage pot.
Food goes out, replenish from the food pot etc. 

We now don't ever think of the £1000 as being money, it's just what the account always sits at. Tbh it's a thing of beauty, and works so well for us. But I appreciate we've had to work really hard to get where we are, and that many are SIGNIFICANTLY worse off.
 

kimwp

Singlespeeder said:

I'm with Rob .... it's seldom you're ever THAT ill you can't look at a banking app!

We're fortunate enough now to be able to work slightly differently, but still with a Starling account.
On Payday we move most of the money into the Starling account.
This sits with a base balance of £1000.  That £1000 is our zero. If there's less than £1000 we're effectively financing our own overdraft, but it allows for those potential sneaky payments we may not have thought about  (tbh these never happen as we have a strangle hold on our finances!).
So payday comes along and we dump our running costs into the account then divvy it up into the appropriate side accounts, Bills, Food, Annuals (the most important one imho) Diesel etc ....bringing the balance back to  £1000.
2nd of the month the £700 mortgage goes out of the £1000 and we replenish it from the Mortgage pot.
Food goes out, replenish from the food pot etc. 

We now don't ever think of the £1000 as being money, it's just what the account always sits at. Tbh it's a thing of beauty, and works so well for us. But I appreciate we've had to work really hard to get where we are, and that many are SIGNIFICANTLY worse off.
 

So all your bills including annuals go out of the £1000 pot? 

I was wondering what the advantage was to counteract the disadvantage of breaking the automation, I guess it's that you only need to log into your starling bank once you've transferred the money?

My system is very simple - wages get paid into one account and bills, cc bill and savings come out of that account a few days after payday (where possible) leaving roughly the right amount for food which I load as needed to a card that gives me a discount. There's a £200 buffer so I don't have to worry about drawing cash, transferring money to pay back a friend etc. Everything else goes on the credit card bill for credit history, payment protection and if there's a big spend that month, I have several weeks to move money from savings.  Minimal effort, maximum peace of mind. Also lucky that I can run this system.

(NB, I know this is not super relevant to the topic, but figure it's keeping the thread at the top of the list and newbies will read the first post which is the helpful one on the topic)

MovingForwards

I remember my previous life, all money going on trying to keep my head above water and the relief of early December pay so I could do something for Christmas; there was no chance of trying to save throughout the year. It was a relief starting over and turning everything around.

Although I live 'pay cheque to pay cheque' now, it's by choice as I like to squirrel money into different savings pots as I never want to walk in those former shoes.

My current job pays every 4 weeks and I quickly got into the habit of moving my wages to another account and some to savings. A few days before the DDs are due, shifting enough back for the bills, a couple of weeks of food and petrol, occasionally going for a second helping of food money but I tend to make my 2 weeks last. 

Hopefully the positive hints and tips in this thread help a few people.

Singlespeeder

kimwp said:

Singlespeeder said:

I'm with Rob .... it's seldom you're ever THAT ill you can't look at a banking app!

We're fortunate enough now to be able to work slightly differently, but still with a Starling account.
On Payday we move most of the money into the Starling account.
This sits with a base balance of £1000.  That £1000 is our zero. If there's less than £1000 we're effectively financing our own overdraft, but it allows for those potential sneaky payments we may not have thought about  (tbh these never happen as we have a strangle hold on our finances!).
So payday comes along and we dump our running costs into the account then divvy it up into the appropriate side accounts, Bills, Food, Annuals (the most important one imho) Diesel etc ....bringing the balance back to  £1000.
2nd of the month the £700 mortgage goes out of the £1000 and we replenish it from the Mortgage pot.
Food goes out, replenish from the food pot etc. 

We now don't ever think of the £1000 as being money, it's just what the account always sits at. Tbh it's a thing of beauty, and works so well for us. But I appreciate we've had to work really hard to get where we are, and that many are SIGNIFICANTLY worse off.
 

So all your bills including annuals go out of the £1000 pot? 

Indeed. We pay just over £2k into the Starling account on payday so the £1000 briefly goes up to £3000.
The £2000 then gets divvyed up into numerous side pots, taking us back down to £1000.
Our biggest outgoing is the mortgage at £700 so the £1000 easily covers that, eliminating ever missing a payment should the wages be late for whatever reason.
Only after the payments go out, and ALL DD's go out of the £1000 pot, do we replenish the £1000 from the appropriate side pot.
I'm not saying it's perfect and may not work for others but we have zero debts other than the Mortgage, and no credit cards.
It works for us.

peb

Back in topic, my employers '"did us a favour " by paying early so we could take advantage of Black Friday. Scary.