Beware the December pay trap!

EssexHebridean

Floss said:

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.

BiB - And this is why we quite desperately need more education around this issue! 

The question of paying a day ahead of the last working day is actually quite a sensible one as for anyone who needs to move money manually for 1st of the month bills, it reduces the risk of them not doing it in time, and it's not far enough ahead that it would cause the majority of people any issues. 

GeorgianaCavendish

I was just thinking about this thread as work sent the announcement that December payday is a week early on 20th. 

After so many years of spending it all early in December and then slogging through an unending January, it is still a little shock for this reformed spendthrift that I’m not desperately waiting for this to do my Christmas shopping and the only real difference will be transferring my bills money across a bit early so I can switch off and enjoy the break. 

DietIrnBru

Open a regular saver - divide your annual take home pay by 12 - deposit into a regular saver - 13th wage at end of the year - I do it every year and it avoid this situation.

kimwp

DietIrnBru said:

Open a regular saver - divide your annual take home pay by 12 - deposit into a regular saver - 13th wage at end of the year - I do it every year and it avoid this situation.

Are you putting your entire take home pay into a regular saver?

TheAble

kimwp said:

DietIrnBru said:

Open a regular saver - divide your annual take home pay by 12 - deposit into a regular saver - 13th wage at end of the year - I do it every year and it avoid this situation.

Are you putting your entire take home pay into a regular saver?

Must be monthly I would have thought? Seems a reasonable strategy anyway.

EssexHebridean

DietIrnBru said:

Open a regular saver - divide your annual take home pay by 12 - deposit into a regular saver - 13th wage at end of the year - I do it every year and it avoid this situation.

if someone can afford to place a 12th of their monthly income into regular savers then that is always a good thing to do anyway, but it doesn't "solve" this problem in any real sense - it just creates a way around it causing problems, but also means that a false picture of savings is created. 

Imagine - someone doing that 12th of their monthly pay into  regular saver accounts, and then also budgeting properly, and not spending their December Pay before 1st January...not only do their have a proper budget to work to, but they also build a nice little pot of savings year on year! 

TheAble

EssexHebridean said:

DietIrnBru said:

Open a regular saver - divide your annual take home pay by 12 - deposit into a regular saver - 13th wage at end of the year - I do it every year and it avoid this situation.

if someone can afford to place a 12th of their monthly income into regular savers then that is always a good thing to do anyway, but it doesn't "solve" this problem in any real sense - it just creates a way around it causing problems, but also means that a false picture of savings is created. 

Imagine - someone doing that 12th of their monthly pay into  regular saver accounts, and then also budgeting properly, and not spending their December Pay before 1st January...not only do their have a proper budget to work to, but they also build a nice little pot of savings year on year! 

It must be borne in mind though EH that inevitably people's expenditure will go up in December because of Christmas. So saving up for it throughout the year seems to be a good idea.

RAS

TheAble said:

EssexHebridean said:

DietIrnBru said:

Open a regular saver - divide your annual take home pay by 12 - deposit into a regular saver - 13th wage at end of the year - I do it every year and it avoid this situation.

if someone can afford to place a 12th of their monthly income into regular savers then that is always a good thing to do anyway, but it doesn't "solve" this problem in any real sense - it just creates a way around it causing problems, but also means that a false picture of savings is created. 

Imagine - someone doing that 12th of their monthly pay into  regular saver accounts, and then also budgeting properly, and not spending their December Pay before 1st January...not only do their have a proper budget to work to, but they also build a nice little pot of savings year on year! 

It must be borne in mind though EH that inevitably people's expenditure will go up in December because of Christmas. So saving up for it throughout the year seems to be a good idea.

Precisely, that's what your Christmas and birthday pot is for. But that should be in your budget, divided by 12, so you know how much you can afford to spend. Likewise the replacing white goods, car, car replacement, dental and medical, holiday, (house repair) and emergency funds.

If you can live comfortably on what's left, you can splurge a bit occasionally.

If you are running a negative budget when you factor in those items, you need to get realistic about what you can afford. That means reducing every spend you can, getting creative with freegle/freecycle, buying in sales, etc.

Unfortunately, some people don't have budgets or these savings, and can feel the pressure when they've got money in the bank just before next pay day.

Makes January long, cold and hard and tips many into debt.

EssexHebridean

TheAble said:

EssexHebridean said:

DietIrnBru said:

Open a regular saver - divide your annual take home pay by 12 - deposit into a regular saver - 13th wage at end of the year - I do it every year and it avoid this situation.

if someone can afford to place a 12th of their monthly income into regular savers then that is always a good thing to do anyway, but it doesn't "solve" this problem in any real sense - it just creates a way around it causing problems, but also means that a false picture of savings is created. 

Imagine - someone doing that 12th of their monthly pay into  regular saver accounts, and then also budgeting properly, and not spending their December Pay before 1st January...not only do their have a proper budget to work to, but they also build a nice little pot of savings year on year! 

It must be borne in mind though EH that inevitably people's expenditure will go up in December because of Christmas. So saving up for it throughout the year seems to be a good idea.

Oh I completely agree - but should someone be spending a full month's salary on Christmas, which is what the "regular saver" idea seems to be suggesting? My personal feeling is not.  Unquestionably Christmas (and indeed other presents bought through the year for birthdays etc) should be budgeted for on a monthly basis though. 

RAS phrases it brilliantly.

if I could change just one thing about christmas, it would be to prevent the pressure in advertising. The one currently driving me nuts is Asda - "put on a show this Christmas" - or alternatively, how about not feeling like you need to "put on a show"?! If the people sitting around your table are that in need of impressing - at often huge cost - then they are probably not the right people. 

kimwp

EssexHebridean said:

TheAble said:

EssexHebridean said:

DietIrnBru said:

Open a regular saver - divide your annual take home pay by 12 - deposit into a regular saver - 13th wage at end of the year - I do it every year and it avoid this situation.

if someone can afford to place a 12th of their monthly income into regular savers then that is always a good thing to do anyway, but it doesn't "solve" this problem in any real sense - it just creates a way around it causing problems, but also means that a false picture of savings is created. 

Imagine - someone doing that 12th of their monthly pay into  regular saver accounts, and then also budgeting properly, and not spending their December Pay before 1st January...not only do their have a proper budget to work to, but they also build a nice little pot of savings year on year! 

It must be borne in mind though EH that inevitably people's expenditure will go up in December because of Christmas. So saving up for it throughout the year seems to be a good idea.

Oh I completely agree - but should someone be spending a full month's salary on Christmas, which is what the "regular saver" idea seems to be suggesting? My personal feeling is not.  Unquestionably Christmas (and indeed other presents bought through the year for birthdays etc) should be budgeted for on a monthly basis though. 

RAS phrases it brilliantly.

if I could change just one thing about christmas, it would be to prevent the pressure in advertising. The one currently driving me nuts is Asda - "put on a show this Christmas" - or alternatively, how about not feeling like you need to "put on a show"?! If the people sitting around your table are that in need of impressing - at often huge cost - then they are probably not the right people. 

We're not here to dictate what people spend their money on.