Controlling 4 weekly in and monthly out

FlorayG

Rob5342 said:

Monzo is brilliant, i dont know how I'd manage without it now. You could set up a bills pot, set all your direct debits to come from that pot, and then transfer your total bills amount into it when you get paid. That would mean you'd have enough money in the pot to cover any direct debts that were taken before your next payday, plus a bit extra sometimes depending on when the direct debts fall. You could either take that extra bit out when you are next paid or manually look ahead and see which direct wont need to be covered. 

Do you mean treat my salary as if it was monthly and transfer enough to pay a whole month's DD each 4 weeks? Thus always leaving me with a bit over? But I can't see how to make payments directly from a pot

wiseonesomeofthetime

FlorayG said:

I spoke with Monzo and they didn't have a clue what I was asking about. How do you set things up so that a payment goes out of a pot instead of out of your front line current account?

Click on the DD or scheduled payment and you will see an option "Set payment from pot"

Select your pot.

It will still appear on your transaction feed, but it will have a small icon in the larger icon to indicate that it has come out of a pot.

Note though, that it can only be attached to one of their own non-interest pots, not the 4.1% (or 4.6% if package account) one, sadly.

surreysaver

Surely 4 weekly is better than monthly? You get paid earlier each month until one month you get paid twice, then it starts again.
Just put the money in a high interest easy access savings account and transfer it when you need it? 

Rob5342

FlorayG said:

Rob5342 said:

Monzo is brilliant, i dont know how I'd manage without it now. You could set up a bills pot, set all your direct debits to come from that pot, and then transfer your total bills amount into it when you get paid. That would mean you'd have enough money in the pot to cover any direct debts that were taken before your next payday, plus a bit extra sometimes depending on when the direct debts fall. You could either take that extra bit out when you are next paid or manually look ahead and see which direct wont need to be covered. 

Do you mean treat my salary as if it was monthly and transfer enough to pay a whole month's DD each 4 weeks? Thus always leaving me with a bit over? But I can't see how to make payments directly from a pot

Yes, you will always have enough to cover everything but sometimes you'll get a bit left over as the next pay will come before some of the bills. You can wait until payday and transfer out what's left, or alternatively if you look in the pot you can see all the scheduled payments and when they are due to be taken, so if any occur after your next pay day you can transfer that amount out.

wiseonesomeofthetime

I went from 4-weekly pay to monthly pay quite a while ago and, while on the surface it may seem like a bonus with a "free" month where your mortgage does not come out of your salary, I think a few people may be assuming that the employee can survive quite easily on the reduced salary that they receive in the other 12 pay packets.

Imagine budgets being "ok, but tight" on a full month salary, only for a chunk to suddenly not be available when you possibly need it most.

I was ok. My budget was comfortably inside my pay packet, and then I had the luxury of no mortgage payment around November each year, just in time for Xmas budget, and of course, no council tax, TV licence, other monthly bills.

Not going to be as positive a move for everyone. Just saying.

pochisoldi

Rob5342 said:

Open a new account and get paid into that, and set up a standing order from that to your main account on the 28th of the month. Your main account will get a regular payment on the same day and once a year it will roll round and you'll have a whole months spare. 

Like he said^^^^

I've used that strategy for the last 25 years, and it has survived:
Paid on the 24th
Paid on the 15th
Paid on the last working day of the month
Paid every 4 weeks
Paid on the 15th
Paid on the 25th
Paid on the last working day of the month.

It should be noted that Barclays bank (for one) allows you to setup standing orders which will go out on a fixed day each month (or the next working day if at a weekend), every 4 weeks, or on the last working day of the month, although when paid on the last working day of the month, the standing order into my "budget" account goes out on the 1st of the next month.

When I was paid every 4 weeks, the standing order was for 1/13th rather than 1/12th of the annualised sum of the bills going out (so no "free month" - the pay was too low at the time to afford to accrue savings)

Jami74

Rob5342 said:

Open a new account and get paid into that, and set up a standing order from that to your main account on the 28th of the month. Your main account will get a regular payment on the same day and once a year it will roll round and you'll have a whole months spare. 

This.
Or simply transfer wages out on payday into easy access savings account and transfer it back on a 'payday' of your choice (my self chosen 'payday' is 1st of the month). The first month is the trickiest if you don't have some savings to act as a buffer or an interest free credit card to help with usual spending but over the course of time it balances out.

pochisoldi

I started doing the "secondary current account for budgeting" thing in the aftermath of clearing some credit card debt caused by poor money management on my part.

Initially it was a case of putting the monthly/regular bill money out of the way, so that the balance of my "main" current account reflected "money I've got left to spend".

I then moved to an "rudimentary" offset mortgage which had a savings account that would allow for outgoing direct debits and bill payments but no chequebook (you still needed one back then), so that became the budget account - same deal with the bills every month, with the bonus that the "waiting" money was working for me. At that point I also started to transfer over the full credit card balance when the statement arrived, and then had the credit card bill go out of the budget account.

The next change came when I moved house. Got an offset mortgage, but this time all my accounts could be offset including the "main" one. My financial situation was a lot better than before, so the "budget" current account (moved to new provider) reverted to being for monthly bills.
Also by this time virtually every penny of discretionary spend had been moved to credit card

There will probably be another change in a few years time when the offset mortgage (interest only, offset down to a minimal level) gets cleared. Then I'll be looking for another bank account that pays interest when in credit.

Note that you don't need to hold your "main" and "budget" accounts with the same bank - using different banks allows you to satisfy the "always have a second bank account" advice that's often mentioned around here (and which most people ignore until it's too late and they have a problem with their only account).

Rob5342

You dont even need separate accounts, modern banks like Monzo and Starling let you split your money into pots/spaces and have the direct debts come out of those which is much more flexible. I'd always recommend having a second account with a different bank though, I've kept my old Halifax one as a backup. 

GibbsRule_No3.

Look at it as practice for receiving your State Pension. That is paid (mostly, I know you can get it weekly) every four weeks, so once a year you get the magical 13th payment in a month, I had mine in May this year.