Beware the December pay trap!

Indout96

We moved to our latest budget in 2008 and at the time took up an idea from Alvin Hall (Still have a few of his books with some great ideas) that you should only spend money you earn this month in the next month. It has worked well so far so any money received in wages / pensions in December no matter when they arrive will not be touched until January anyway. 
As things have evolved we now run a (Dave Ramsey) zero based budget on the first of every month which runs well as the money is already sat there waiting to be allocated.
 

EssexHebridean

I think most of us are able to understand that there can be legitimate reasons for companies to need to pay early, but perhaps allowing for how much the “January is a long month” rhetoric has generally permeated, it’s time for those who do pay early for unavoidable reasons to just add a gentle reminder to those being paid that although they may be getting their money a week or two early, it does still have to pay all the usual bills in January! It’s patently obvious that a lot of people simply do forget that, and treat the early pay as a chance to splurge a bit more on Christmas! 

kimwp

Indout96 said:

We moved to our latest budget in 2008 and at the time took up an idea from Alvin Hall (Still have a few of his books with some great ideas) that you should only spend money you earn this month in the next month. It has worked well so far so any money received in wages / pensions in December no matter when they arrive will not be touched until January anyway. 
As things have evolved we now run a (Dave Ramsey) zero based budget on the first of every month which runs well as the money is already sat there waiting to be allocated.
 

How does this work practically?

Indout96

kimwp said:

Indout96 said:

We moved to our latest budget in 2008 and at the time took up an idea from Alvin Hall (Still have a few of his books with some great ideas) that you should only spend money you earn this month in the next month. It has worked well so far so any money received in wages / pensions in December no matter when they arrive will not be touched until January anyway. 
As things have evolved we now run a (Dave Ramsey) zero based budget on the first of every month which runs well as the money is already sat there waiting to be allocated.
 

How does this work practically?

We basically cut out 100% of nonessential spending until we had a months worth of bill / spending money in front - not savings just spending (it took us a while - about 5 months if I remember correctly) then used that from the start of the next month with everything earned in that month going to the next month. you only need to sacrifice once as its self sustaining from then on.

For the Zero based budget you just take your monthly amount in (easy to know as its from last month so you already have it) and give every £ a home (category) to be spent in including savings. it will take a few months to get it 100% right. All our payments in go to HSBC, anything left after bills (DD) and housekeeping (food) money is transferred to Chase where it is split into the 4% paying savings pots.
we have pots for Petrol, Holidays, Gas & electric top up (no point letting the company gain from being too far in credit) savings (usable) spending money for the month, car insurance / running costs and finally Xmas  for next year. 

kimwp

Indout96 said:

kimwp said:

Indout96 said:

We moved to our latest budget in 2008 and at the time took up an idea from Alvin Hall (Still have a few of his books with some great ideas) that you should only spend money you earn this month in the next month. It has worked well so far so any money received in wages / pensions in December no matter when they arrive will not be touched until January anyway. 
As things have evolved we now run a (Dave Ramsey) zero based budget on the first of every month which runs well as the money is already sat there waiting to be allocated.
 

How does this work practically?

We basically cut out 100% of nonessential spending until we had a months worth of bill / spending money in front - not savings just spending (it took us a while - about 5 months if I remember correctly) then used that from the start of the next month with everything earned in that month going to the next month. you only need to sacrifice once as its self sustaining from then on.

For the Zero based budget you just take your monthly amount in (easy to know as its from last month so you already have it) and give every £ a home (category) to be spent in including savings. it will take a few months to get it 100% right. All our payments in go to HSBC, anything left after bills (DD) and housekeeping (food) money is transferred to Chase where it is split into the 4% paying savings pots.
we have pots for Petrol, Holidays, Gas & electric top up (no point letting the company gain from being too far in credit) savings (usable) spending money for the month, car insurance / running costs and finally Xmas  for next year. 

Thanks Indout. Does that mean you have a separate account that your wage gets paid to and you leave it there until the next month?

tealady

When I was working my employer used to pay us early.
I started saving with a credit union, the money was deducted from my pay.
Took a couple of months to get used to the shortfall but meant I always had money for Christnas.
Having money taken from my pay packet helped me as I lacked the discipline to save.

EssexHebridean

Tealady - yes, this is the same principle as when teaching budgeting, we suggest that people make dedicated savings payments at the very beginning of the month, because the money has then gone from the general pot and so avoids the "we'll just save what we have left at the end of the month" approach. 

Floss

My employers have emailed all staff today, with December & January pay dates: 

20th December
24th January
27th February & monthly thereafter

kimwp

Floss said:

My employers have emailed all staff today, with December & January pay dates: 

20th December
24th January
27th February & monthly thereafter

Did they give any reason why?

Floss

kimwp said:

Floss said:

My employers have emailed all staff today, with December & January pay dates: 

20th December
24th January
27th February & monthly thereafter

Did they give any reason why?

We've always been paid early at Christmas and last year January's pay was earlier than 31st after staff requested it be brought forward to avoid the 6 week month. The pay date was also shifted to 27th of every month (rather than last working day) at the same time.

So effectively we have two 5-week months in January & February.