Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • EssexHebridean
    • By EssexHebridean 17th Dec 18, 10:02 PM
    • 9,816Posts
    • 49,847Thanks
    EssexHebridean
    Beware the December pay trap!
    • #1
    • 17th Dec 18, 10:02 PM
    Beware the December pay trap! 17th Dec 18 at 10:02 PM
    Yep - here we are again, time for the annual warning thread,,,

    I'm talking about the "December pay trap" - you know the one, rather than being paid on the last day of the month, or the 28th, "because it's Christmas" your company set up the pay run early - anything from 10 days early. The money lands in your bank account, and you start spending....regardless of the fact that usually, you'd manage for another week on the previous month's pay. And then, come mid January, the money has run out. Sound familiar?

    Rather than thinking "Oh good, I've got paid early" let this be the year that you pick up that pay, and ditch it into a savings account. One that you don't have a debit card for. And then ignore it, until 31st December (or whatever your usual pay date would be), when you can transfer it back to your current account to meet your commitments for the month. Remember, nobody will be taking Direct Debits early - if anything they go out slightly late, and come January you will still NEED that money just as you do every other month, so put it out of temptation's way.

    To put things into perspective - if you get paid on the 22nd, rather than the 30th, and you start dipping into it immediately - that "month's" pay then has to stretch nearly 6 weeks. And we all know that's not going to happen, which is when the credit cards come out again.

    Over the last few years on this forum we have seen SO many people in a panic in January for this very reason. Don't let yourself be one of them.

    As ever Merry Christmas DFW'ers - have a wonderful christmas, remember that happiness comes from love and caring, not from spending money!
    MORTGAGE FREE 30/09/2016
    SOA CALCULATOR (for DFW newbies): SOA Calculator
Page 3
    • Mrs_Ryan
    • By Mrs_Ryan 7th Nov 19, 10:31 PM
    • 11,092 Posts
    • 20,995 Thanks
    Mrs_Ryan
    We’re not getting paid until the 31st- thankfully I get two lots of PIP in December due to the way the dates fall so I’ll be okay (and I’ve done all my Xmas shopping) My student loan, January PIP and wages will all land together in January though so I’ll feel rich but won’t be
    Open University 2:1 Graduate 2017; MA at DMU complete 2018- MERIT!! Round 2 OU 2018- BSc Combined STEM (Sports Psychology) Year 1 PASS! E117 &DE100. Year 2- K220 and E235.
    Got Engaged 02/10/2018 Civil Partnership 15/02/20
    Strictly 2019- TEAM RAMSEY!
    Elle
    • Takmon
    • By Takmon 7th Nov 19, 10:49 PM
    • 983 Posts
    • 982 Thanks
    Takmon
    I work for the NHS and agree that this is not a helpful way to pay people. It's a 24/7 service, and I'm fairly sure the payroll people are in the office on the 27th of Dec, so why can't they pay people nearer the end of the month. Or just set up the electric payment to do it for them as they always do? We are not in the dark ages.

    Their thinking behind making January an earlier pay date is that February is a short month, so this year it will be:
    Dec 19th (the day before our Christmas party...)
    Jan 23rd
    Feb 27th
    (pay day always the last Thursday of the month, except in Dec and Jan when it's the second last Thursday).

    It doesn't affect me because I've always done as you suggested and don't look at the December pay until the end of Dec. But there are a lot of people I work with who can't wait to be paid for Christmas and then make posts on Facebook about how they are skint on the 12th of January.

    This paying early in January only encourages that, I think, like that's what they expect to happen because people can't manage their money.

    Payroll needs to get their priorities sorted!
    Originally posted by clairebeth
    But its not the payrolls job to nanny the companies employees and make sure they pay them on the right days so they don't spend all their money.

    All the employees are adults so they should be treated like adults and if they want to blow a months pay in one week that's up to them and not anybody else's fault.

    Like I said earlier in this thread if you manage your money properly then it doesn't matter how early you get paid because it makes no difference to your budget.

    If people keep making the same mistake every year and never learn then they have no one to blame but themselves.
    • sourcrates
    • By sourcrates 7th Nov 19, 11:05 PM
    • 18,779 Posts
    • 17,687 Thanks
    sourcrates
    But its not the payrolls job to nanny the companies employees and make sure they pay them on the right days so they don't spend all their money.

    All the employees are adults so they should be treated like adults and if they want to blow a months pay in one week that's up to them and not anybody else's fault.

    Like I said earlier in this thread if you manage your money properly then it doesn't matter how early you get paid because it makes no difference to your budget.

    If people keep making the same mistake every year and never learn then they have no one to blame but themselves.
    Originally posted by Takmon
    This advice is aimed at those who perhaps know they should budget better, but find it really difficult at this time of year to balance the books.
    There is so much pressure from all directions to spend what we can’t afford, advertising everywhere, kids nagging for the latest tech, it is very difficult to say no, many do give in to temptation.

    This is a regular seasonal post aimed at helping those who may benefit from more effective budgeting over the Christmas period.
    Last edited by sourcrates; 08-11-2019 at 12:18 AM.
    I'm a Board Guide on the Debt-Free Wannabe, Credit File and Ratings, Bankruptcy And Living With It, boards. "I volunteer to help get your forum questions answered and keep the forum running smoothly".
    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to:
    forumteam@moneysavingexpert.com.
    Any views expressed are mine and not the official line of MoneySavingExpert.com.
    For free debt advice, contact either : Stepchange, National Debtline, CitizensAdviceBureaux.
    • Takmon
    • By Takmon 8th Nov 19, 12:36 PM
    • 983 Posts
    • 982 Thanks
    Takmon
    This advice is aimed at those who perhaps know they should budget better, but find it really difficult at this time of year to balance the books.
    There is so much pressure from all directions to spend what we canít afford, advertising everywhere, kids nagging for the latest tech, it is very difficult to say no, many do give in to temptation.

    This is a regular seasonal post aimed at helping those who may benefit from more effective budgeting over the Christmas period.
    Originally posted by sourcrates
    Yes I understand that and agree that's it's a good discussion to have at this time of year so people can start thinking about it and planning how they will manage their money.

    The point I was making in my post is that it is in no ways the payrolls fault if they are unable to manage it and if you blame payroll your just deflecting the problem and it makes people less likely to take action; which is what this thread is all about getting people to do.
    • Andyjflet
    • By Andyjflet 8th Nov 19, 2:49 PM
    • 158 Posts
    • 141 Thanks
    Andyjflet
    Good reminder and advice. Strangely I don't think pensions get paid early (ours isn't anyway) so why salaries need to be done 10 days early is a mystery to me. Most companies shut off their payroll by about 7th or 8th anyway for salaries paid around end of the month so why in December they need to pay on 18th instead of 28th or 30th I don't know. Maybe some one who works in payroll could elaborate?
    Originally posted by enthusiasticsaver
    I think its to do with any errors, if there are any then there is nobody around to sort it out, undisturbed holiday lol
    Baby Step 1 - £0 saved for emergency fund
    M&S Loan £14708 inc interest full term
    Santander 0% CC £1183.64
    Sainsburys 0% CC £2499
    Hitachi Loan 0% £173.44 ends March 2020
    • Davy Jones II
    • By Davy Jones II 8th Nov 19, 3:22 PM
    • 458 Posts
    • 882 Thanks
    Davy Jones II
    I work for the NHS and agree that this is not a helpful way to pay people. It's a 24/7 service, and I'm fairly sure the payroll people are in the office on the 27th of Dec, so why can't they pay people nearer the end of the month. Or just set up the electric payment to do it for them as they always do? We are not in the dark ages.
    Originally posted by clairebeth
    I literally cannot understand the mindset of people who manage to turn an early pay day into a financial problem.

    Do people actually see the money hit their account, think itís free money, and so spend more than they normally would that month?

    When it arrives everyone will still have the money from the previous month that they were planning to use, is it this that they decide to blow?

    Whatís the actual thinking here? Are people budgeting based on their bank balance at any one moment in time? Surely no-one is that silly, are they?
    • sourcrates
    • By sourcrates 8th Nov 19, 4:04 PM
    • 18,779 Posts
    • 17,687 Thanks
    sourcrates
    When it arrives everyone will still have the money from the previous month that they were planning to use, is it this that they decide to blow?
    Originally posted by Davy Jones II

    Money from the previous month ?

    I don`t think many people these days have much money left in the run up to payday, they tend to live payday to payday, for low income famillies especially, the idea of budgeting correctly is all well and good, but for a lot of people it remains a far off dream.
    Not many agree a budget, then stick to it, which is why borrowing on credit before month end is so common.

    If you can pull it off, fair play to you, but the struggles of everyday life make it exceptionally hard for a lot to achieve, the wealth divide in this country is unbeleivable, and getting wider.
    I'm a Board Guide on the Debt-Free Wannabe, Credit File and Ratings, Bankruptcy And Living With It, boards. "I volunteer to help get your forum questions answered and keep the forum running smoothly".
    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to:
    forumteam@moneysavingexpert.com.
    Any views expressed are mine and not the official line of MoneySavingExpert.com.
    For free debt advice, contact either : Stepchange, National Debtline, CitizensAdviceBureaux.
    • EssexHebridean
    • By EssexHebridean 11th Nov 19, 1:36 PM
    • 9,816 Posts
    • 49,847 Thanks
    EssexHebridean
    Our company has always paid early in December to "allow people to do Christmas shopping"!! We are paid on 25th of each month, but in December have been known to get paid as early as 12th December.
    Originally posted by B3C
    This is a truly appalling message to put over to people unless you are going to back it uip with a "but remember, you won't be paid again until X date, so make sure that your budget balances" type message as well for balance.

    But its not the payrolls job to nanny the companies employees and make sure they pay them on the right days so they don't spend all their money.
    Originally posted by Takmon
    It's also not payroll's job to encourage people to use early pay "for Christmas shopping" as in the post quoted above when that should already have been budgeted for.
    MORTGAGE FREE 30/09/2016
    SOA CALCULATOR (for DFW newbies): SOA Calculator
    • EssexHebridean
    • By EssexHebridean 11th Nov 19, 1:39 PM
    • 9,816 Posts
    • 49,847 Thanks
    EssexHebridean
    I literally cannot understand the mindset of people who manage to turn an early pay day into a financial problem.

    Do people actually see the money hit their account, think it’s free money, and so spend more than they normally would that month?

    When it arrives everyone will still have the money from the previous month that they were planning to use, is it this that they decide to blow?

    What’s the actual thinking here? Are people budgeting based on their bank balance at any one moment in time? Surely no-one is that silly, are they?
    Originally posted by Davy Jones II
    Money from the previous month? If you're budgeting correctly any surplus at the end of the previous month should have been diverted to either clearing debts, or savings, surely?

    It's not about people being "silly" - it's about a time of year when the pressure to spend is high, and people are perhaps not thinking as clearly as they otherwise might. And if one thread can make a different to a few of those people - and the earlier replies to this AND previous threads on the subject tell me that this is the case, then all the thread-spoiling attempts in the world are just wasting their time, thankfully!
    MORTGAGE FREE 30/09/2016
    SOA CALCULATOR (for DFW newbies): SOA Calculator
    • username901
    • By username901 11th Nov 19, 5:10 PM
    • 146 Posts
    • 203 Thanks
    username901
    Expect to see most of these people on the debt free wannabe board come January, blaming those nasty Tories and bankers for their inability to not spend what they don't have.
    • monetxchange
    • By monetxchange 11th Nov 19, 6:27 PM
    • 67 Posts
    • 118 Thanks
    monetxchange
    My work tend to do our usual pay dates in December and January, but also try to do a mid December part wage that would be deducted from your January wage. Last year I told them I didn't want the mid-Dec pay and they were fine with it. Worth asking them to hold off if your work does something similar!
    Highest Debt: £29,500. LBM: April 2019
    TO GO: Barclaycard £11,307 £3,700 | Overdraft £2,575 £500
    GONE: HMRC £8,500 £0 | Renovations £3,500 £0 | Vanquis £3,222 £0 | Capital One £1,410 £0
    SAVED: Emergency Fund: £3,400. Tax Bill Fund: £6,100.
    • clairebeth
    • By clairebeth 11th Nov 19, 6:35 PM
    • 203 Posts
    • 172 Thanks
    clairebeth
    Hi, I wasn't blaming payroll for people spending their money, but I do think it makes it a lot more confusing. They should just stick to their 'last Thursday in the month' pay, then at least everyone knows where they are at year round. For those that budget month to month it creates a three week month followed by two five week months.
    Presumably it's less hassle for payroll also. That's what I meant by sorting their priorities, not letting a holiday change the way they operate.
    • EssexHebridean
    • By EssexHebridean 12th Nov 19, 11:51 AM
    • 9,816 Posts
    • 49,847 Thanks
    EssexHebridean
    My work tend to do our usual pay dates in December and January, but also try to do a mid December part wage that would be deducted from your January wage. Last year I told them I didn't want the mid-Dec pay and they were fine with it. Worth asking them to hold off if your work does something similar!
    Originally posted by monetxchange
    Great tip - thank you! Again quite alarming that workplaces would do stuff like this - at least without fully presenting the flip-side.

    Hi, I wasn't blaming payroll for people spending their money, but I do think it makes it a lot more confusing. They should just stick to their 'last Thursday in the month' pay, then at least everyone knows where they are at year round. For those that budget month to month it creates a three week month followed by two five week months.
    Presumably it's less hassle for payroll also. That's what I meant by sorting their priorities, not letting a holiday change the way they operate.
    Originally posted by clairebeth
    Clairebeth I think everyone understood what you meant in your post - and one person just chose to ignore that for the purposes of thread-spoiling. He has a track record of this behaviour in threads that are designed to help people in this way. You're absolutely right in what you said, for my money!
    MORTGAGE FREE 30/09/2016
    SOA CALCULATOR (for DFW newbies): SOA Calculator
    • boliston
    • By boliston 12th Nov 19, 12:17 PM
    • 2,904 Posts
    • 2,477 Thanks
    boliston
    I only ever actually spend on my credit cards (never use debit cards or cash) so getting paid early does not make any difference whatsoever as my credit cards are normally due for payment in the first week of the following month
    • EssexHebridean
    • By EssexHebridean 12th Nov 19, 12:22 PM
    • 9,816 Posts
    • 49,847 Thanks
    EssexHebridean
    I only ever actually spend on my credit cards (never use debit cards or cash) so getting paid early does not make any difference whatsoever as my credit cards are normally due for payment in the first week of the following month
    Originally posted by boliston
    And set up to pay off in full, I assume? This can indeed be a good way of managing things though.
    MORTGAGE FREE 30/09/2016
    SOA CALCULATOR (for DFW newbies): SOA Calculator
    • boliston
    • By boliston 12th Nov 19, 8:22 PM
    • 2,904 Posts
    • 2,477 Thanks
    boliston
    And set up to pay off in full, I assume? This can indeed be a good way of managing things though.
    Originally posted by EssexHebridean

    Yep as it would be a costly way to borrow and the interest would more than wipe out any cashback earnt - (I always use bacs rather than dd to pay it)
    • Davy Jones II
    • By Davy Jones II 12th Nov 19, 10:35 PM
    • 458 Posts
    • 882 Thanks
    Davy Jones II
    Money from the previous month ?

    I don`t think many people these days have much money left in the run up to payday, they tend to live payday to payday, for low income famillies especially, the idea of budgeting correctly is all well and good, but for a lot of people it remains a far off dream.
    Originally posted by sourcrates
    Even were that the case (and I doubt it), an early payday still means money arriving before the previous monthís pay has been spent.

    Or are you claiming that because people know itís arriving early that they go out and blow the housekeeping?
    • sourcrates
    • By sourcrates 12th Nov 19, 11:00 PM
    • 18,779 Posts
    • 17,687 Thanks
    sourcrates
    Even were that the case (and I doubt it), an early payday still means money arriving before the previous monthís pay has been spent.

    Or are you claiming that because people know itís arriving early that they go out and blow the housekeeping?
    Originally posted by Davy Jones II
    Well I would suggest that is the case, as the number of people relying on credit part way through the month is on the increase, as the early payday in December is used to fund Christmas by great numbers of people, that is why there is always, year on year, a massive influx of new posters to this forum asking for debt help, in January when the bills hit the doormat.

    We have seen this happen year after year since I joined this forum, it is a sad fact of life for many, hence the need for this thread, itís extremely hard to say no to your children when all their friends have the latest gear, trying to keep up with the Jonesís, itís a live for today, Sod tomorrow attitude, not ideal I agree, but that is life for many these days.
    I'm a Board Guide on the Debt-Free Wannabe, Credit File and Ratings, Bankruptcy And Living With It, boards. "I volunteer to help get your forum questions answered and keep the forum running smoothly".
    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to:
    forumteam@moneysavingexpert.com.
    Any views expressed are mine and not the official line of MoneySavingExpert.com.
    For free debt advice, contact either : Stepchange, National Debtline, CitizensAdviceBureaux.
    • EssexHebridean
    • By EssexHebridean 13th Nov 19, 11:26 AM
    • 9,816 Posts
    • 49,847 Thanks
    EssexHebridean
    Even were that the case (and I doubt it), an early payday still means money arriving before the previous monthís pay has been spent.

    Or are you claiming that because people know itís arriving early that they go out and blow the housekeeping?
    Originally posted by Davy Jones II
    No - in a lot of cases at this time of year where the pressure to spend is high a lot of people will already be into their overdrafts - so money coming in "early" will be absorbed into that, or used to cover more of that "pressured spending".

    You may not find this occurs - I don't either, I'm in a position where I can budget for Christmas spending, and as my originating post for the thread says, if I DO get early pay in December I just ignore it or shift it to savings where it will earn a peanut in interest until "payday" arrives - but you and I need to remember that we are in a privileged position in this regard, and not everybody else has that privilege, rather than dismissing the issues they face as them being "stupid" or "ill-advised". It's not always as clear cut as someone "blowing the housekeeping" on some sort of whim - and it's incredibly flippant and dismissive to suggest that this is the case.

    The underlined words in your post - by the way - show beyond all doubt that you are a long way adrift of being in touch with the problems faced by a lot of visitors to these forums - and this board in particular. Please - accept that you don't have to understand what causes these problems, but, when on the DFW boards, you do have to tolerate that situation and treat it non-judgmentally. In my opinion your posts are currently falling short of that fairly simple DFW benchmark.
    Last edited by EssexHebridean; 13-11-2019 at 11:36 AM.
    MORTGAGE FREE 30/09/2016
    SOA CALCULATOR (for DFW newbies): SOA Calculator
    • EssexHebridean
    • By EssexHebridean 13th Nov 19, 11:32 AM
    • 9,816 Posts
    • 49,847 Thanks
    EssexHebridean
    Well I would suggest that is the case, as the number of people relying on credit part way through the month is on the increase, as the early payday in December is used to fund Christmas by great numbers of people, that is why there is always, year on year, a massive influx of new posters to this forum asking for debt help, in January when the bills hit the doormat.

    We have seen this happen year after year since I joined this forum, it is a sad fact of life for many, hence the need for this thread, it’s extremely hard to say no to your children when all their friends have the latest gear, trying to keep up with the Jones’s, it’s a live for today, Sod tomorrow attitude, not ideal I agree, but that is life for many these days.
    Originally posted by sourcrates
    OK - all of this post, but the highlighted bit in particular. Sourcrates has a HUGE amount of experience helping people on the boards and talks a lot of sense here.

    ***********

    If you're reading this thread and thinking "well those people must be pretty thick if they'd do that" then PLEASE - just internalise that. Accept that just by having that knowledge, AND the financial status to be able to manage things as YOU may do - you are privileged. Thank your lucky stars that is the case - regardless of whether you arrived there by a twist of fate, by being fortunate enough to get a level of personal financial education as a child that many on here could only dream of, or whether you have worked hard to achieve that status - saving, paying off debt and learning about managing money at the sharp end. Regardless of your route there, it IS a privilege - and your time is better spent helping others to gain that level of knowledge, than in telling them they are stupid, dismissing the situation that they may find themselves in sometimes through NO fault of their own). Please just move on to another thread rather than posting thread-spoiling comments that may well put those in need of support from joining in the dialogue.
    MORTGAGE FREE 30/09/2016
    SOA CALCULATOR (for DFW newbies): SOA Calculator
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

759Posts Today

5,827Users online

Martin's Twitter