Beware the December pay trap!

enthusiasticsaver

peb said:

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

That isn’t a favour 😂😂. 

kimwp

peb said:

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

Neatly demonstrating the difference between being nice (appearing to help, while possibly actually doing the opposite) and being kind (actually helping!)

EssexHebridean

peb said:

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

That's genuinely worrying. Was that actually their stated reason or just what people hypothesised from the early pay?  So potentially there are going to be some in your organisation who have not only splurged November pay on stuff other than the priorities, but will now do the same with December, leaving them even more up to their necks in January than they would have been otherwise. 

My pay is done as a manual bank transfer (various reasons, no it's not an issue, yes I'm fine with it) but if ever my boss wants for whatever reason to pay me earlier than usual he makes a point of asking if it's OK first. 

fatbelly

My employer has kindly made me a goodwill payment of £500 this month. I normally only make a £20 pension contribution and am below the threshold for tax and NI. This month I have had £175 deducted in total. 

It's a shame because I know these payments will mean our finances as an organisation will take a big hit and the main winner appears to be HMRC.

I wonder if it could have been done more efficiently

peb

I agree it so isn't a favour.  I shared Martin's mantra on the WhatsApp chat where we were informed but I think most think I'm joking.   

And yes, we were told that.  Isn't it great that X did the payroll early so you can buy on black Friday 

We're paid on the 28th usually, that's a working day in December but I suspect we'll be paid before the 23rd.

GeorgianaCavendish

Great reminder with this thread. I'm much more savvy now but in a former life early December pay day was an enormous temptation to spend. 

This year my employer has only moved it forward by a couple of days, but in some years it has been 2+ weeks early. 

peteuk

My wife’s employers have this covered.  Early pay December and January, normal pay February.

This evens the weeks out. 

EssexHebridean

peteuk said:

My wife’s employers have this covered.  Early pay December and January, normal pay February.

This evens the weeks out. 

So - let's say one of your wife's colleagues gets paid early in December and blows the bills money on last minute stuff for Christmas. 3rd Jan - DD's start coming out - and bounce because there isn't enough money in there. All routine spending for the month ends up on credit cards. January pay comes along - early - excellent - so the colleague clears one of the credit cards, and buys a few bits in the sales because, y'know, "it's new year!". Feb 1st - DD's start coming out - and bounce because there isn't enough money in there. February's spending has to go on credit cards. February's pay comes along, normal time. March bills are covered - Hurrah - but the CC spending is still there needing cleared because of the earlier spending pattern encouraged by the earlier pay.  It doesn't even anything out, I'm afraid - there is still the same amount of money coming in, and the same requirement for it to cover the stuff going out. 

In this day and age, with nearly ALL firms using automated pay mechanisms, there is really no need or excuse for paying earlier barring the concept that it helps people to have money early "because it's Christmas" - it is that concept that is flawed, and wrong. 

Flugelhorn

fatbelly said:

My employer has kindly made me a goodwill payment of £500 this month. I normally only make a £20 pension contribution and am below the threshold for tax and NI. This month I have had £175 deducted in total. 

It's a shame because I know these payments will mean our finances as an organisation will take a big hit and the main winner appears to be HMRC.

I wonder if it could have been done more efficiently

reminds me of one of my employers just before I retired, they used to give each employee £1000 pro rata and that was tax free,  so they had to give us enough to account for the extra tax we paid .... I think they wished they hadn't when the £500 they tried to give me cost them over £1000 

foxgloves

Back in the Spendy Decades, I fell headlong into this trap every December. We'd be informed of the early pay-date at work, & I'd think "Oh thank GOODNESS my money's going to be arriving early". I was always well into overdraft by mid-month & all my festive spending meant December was even worse. These days, having been reformed characters for ten years or so, it doesn't matter when December's salary arrives because it simply sits in our bank account waiting to be allocated as usual on my normal budget day. I check that it's arrived, but apart from that, continue to proceed through my December budget as planned.
This year, pay-day will be on Dec 19th......a whole 8 days earlier than normal. I'd have been delighted with that back in the Spendy Era, but I also remember the horrible bank statements/bills which followed in Jan & Feb and am frankly happy never to see their like again.
F