Beware the December pay trap!

EssexHebridean

Rob5342 said:

Sarahspangles said:

It makes it five weeks between paydays - and one of those is Xmas week. It means that colleagues who get a main shop once a week have to be extra careful in January

That shouldn't be a problem if they budget correctly, If someone is paid a week early for example then they should have a weeks money from the previous month left over , so they will have 5 weeks of money to last 5 weeks. I know it's not that easy in practice and ill admit that I have previously relied on getting paid early to.cover Christmas presents and left myself short for January. It's a mindset you can get into if you work at it though. I only get paid a few days early with the company I'm with now so its not so much of a problem, but I started buying presents im September this year and when I'm paid there will be nothing I need to buy. 

Unfortunately not everyone has the knowledge to understand about need to budget - and when a company (as many do) presents early pay as "we thought this would help you out before Christmas!" it's hardly surprising that those with less financial knowledge and ability to plan think "woo hoo!" then spend the January pay before December has finished. 

The best way by miles of dealing with purchasing presents of all types is to budget for them monthly all the way through the year. The same as with anything else that counts as a "big annual" spend - holidays, car service, insurance policies etc. 

kimwp

Rob5342 said:

Sarahspangles said:

It makes it five weeks between paydays - and one of those is Xmas week. It means that colleagues who get a main shop once a week have to be extra careful in January

That shouldn't be a problem if they budget correctly, If someone is paid a week early for example then they should have a weeks money from the previous month left over , so they will have 5 weeks of money to last 5 weeks. I know it's not that easy in practice and ill admit that I have previously relied on getting paid early to.cover Christmas presents and left myself short for January. It's a mindset you can get into if you work at it though. I only get paid a few days early with the company I'm with now so its not so much of a problem, but I started buying presents im September this year and when I'm paid there will be nothing I need to buy. 

The point of this thread is to highlight to those that might not budget correctly.

Rob5342

Maybe I didn't express myself very well. I know that's the point of the thread and I was really just trying to emphasise what it's about. I've struggled through January many times due to poor budgeting, often tempted by an early pay packet. It's only quite recently that I've really started to budget properly.

foxgloves

Really early payday for us. It won't make any difference as the budget I set for December runs to midnight of the 26th as usual, & so none of December's pay will be touched until January's budget cycle, starting on normal pay-day, which is 27th. Back in the bad old spendy days, this isn't how we operated at all & an early payday simply meant frittering away even more funds for an even worse pile of bank statements/credit card bills in January. I couldn't go back to that nonsense.
F

HelenNoreen

My pay day is usually the last working day of the month. The company I work for also do the pay early in December (this year is 23rd, as opposed to what would have been the 31st, with how the days fall). However, what they also do, and have done for years, is bring the January pay forward also; to hep with the spreading out. This year it is the 27th (rather than the 31st). 

Either way, for the first time ever; I plan to move my December salary to a savings account, for as close to the 31st December as I can.

EssexHebridean

Well done Helen!

I tell you one thing that could get some change being seen here - potentially not about the money being paid early, because we all realise that there can be justification for that, but about the messaging. If everyone who's company are paying them "early for christmas" (with that messaging, rather than just the more realistic explanation about payroll queries etc) was to drop a little message to their payroll department saying that yes, they KNOW it should be obvious but it's become apparent from office conversation in the past few years that it's not as obvious as one might think that the money still has to cover January, so perhaps they could accompany the early pay with a little all-parties email to remind everyone that the money dropping into their account is DECEMBER's pay, and that they strongly recommend everyone considers treating it as they would if it were paid on the usual date... Even if just a handful of companies took that suggestion up then it could make a difference to some folk at least. 

I also wonder how much extra interest all this salary shuffling generates across the board - sure, individually it's probably only pennies, but those pennies add up and are better in our pocket than the bank's! 

cdtpjf

Sncjw said:

Can I ask the nhs worker who said January pay is eairler again. What day do you get paid. We get it the 28th but that will be a Monday so won’t be any earlier.

Maybe just nhs scotland getting paid earlier - we’re being paid 19th December and 23rd January. Usually get paid last Thursday of the month although goes in the bank on the Wednesday 

stewartwilliams

I get paid on the 24th Dec, and then the 31st Jan.  5 weeks this year, so not quite as bad as last year that was 6 weeks?
At least I've got a little coming from the 1p challenge that will pay some of my credit card and that will be one less payment from my wages.

kimwp

stewartwilliams said:

I get paid on the 24th Dec, and then the 31st Jan.  5 weeks this year, so not quite as bad as last year that was 6 weeks?
At least I've got a little coming from the 1p challenge that will pay some of my credit card and that will be one less payment from my wages.

If you pretend that you get paid on 31st Dec, instead of 24th Dec, then Jan is only four weeks, as is December 

EssexHebridean

Yep @stewartwilliams - as Kim says, just set the early pay aside somewhere you won’t touch it until your usual pay date, then move it back. If you “need” to break into it early then you have a bigger problem with your budgeting as a whole, and that needs to be looked into and sorted before it turns into a bigger issue!  The only things that are really impacted by 4/5 week months are commuting and grocery spending - at this time of year you are likely to have some savings on the former anyway, and the increase in the latter should really be budgeted for through the year. Budgeting a set sum for groceries per month also means that the shorter months subsidise the longer ones and it balances across the year.