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    • EssexHebridean
    • By EssexHebridean 17th Dec 18, 10:02 PM
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    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
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Page 2
    • MankyVegSoup
    • By MankyVegSoup 19th Dec 18, 9:48 AM
    • 27 Posts
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    MankyVegSoup
    I believe it's a tradition from the days when employers had to go to the bank and withdraw cash to do the wages. With the banks (and often the businesses) closed over the Christmas period it had to be done before everything shut down.


    Even now with (nearly) everything electronic, for many small businesses it's convenient to pay early if they are shutting down or short staffed over Christmas. I used to do it when I employed staff in my business.
    • EssexHebridean
    • By EssexHebridean 19th Dec 18, 4:51 PM
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    EssexHebridean
    Those same people that clamour for it to be paid early are then the ones that will be heard in the New Year bemoaning the fact that January is such a long month. Nope, it's not. It's still just 31 days but because they wanted to be paid early in December they have to wait 41 days for their next wage. So the price for a little gain in December is more pain in January.
    Originally posted by tizerbelle
    Exactly this - I always cringe when I hear people saying that January is a long month in financial terms - amazing how a small change in mindset can make such a big difference!


    In my job we get paid on the 15th every month. Ive only been here four months and struggle as all my bills go out on the 1st. I always think im rich but have to remember not to spend any off it
    Originally posted by debtfreeme2015
    I still have half my DD's set for the 15th because I used to be on a mid-month pay date in a previous job. Gradually as things change I'm switching them over!

    My pay will be a little early because I work for a really small company and they do it as a manual bank transfer - chances are they'll pay me Friday as nobody will be in until New Year after that. (But it's also possible I'll get paid on the 2nd - either is fine, budgeting rules OK! )
    MORTGAGE FREE 30/09/2016
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    • stripeyfox
    • By stripeyfox 22nd Dec 18, 5:32 PM
    • 443 Posts
    • 513 Thanks
    stripeyfox
    My company moved pay day a few years ago from 25th to the 15th so it has smoothed this out a bit (less of a problem for me these days, but has been in the past).

    My old job paid last working day of the month, but in December money would go in really early, maybe the 18th or something. It doesn't really help anyone, and it seemed like about 6 months until the end of January!
    • Sncjw
    • By Sncjw 23rd Dec 18, 10:35 AM
    • 2,249 Posts
    • 1,367 Thanks
    Sncjw
    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 wonít be any earlier.
    • Chandelier.
    • By Chandelier. 23rd Dec 18, 1:21 PM
    • 930 Posts
    • 2,482 Thanks
    Chandelier.
    December pay is all set aside into a seperate account so I don't have the temptation to spend it.

    It's good to remind everyone though.
    Chandelier.
    Current Debt Repaid:
    £104/£619.

    Check out my Diary
    • Deep In Debt
    • By Deep In Debt 23rd Dec 18, 5:41 PM
    • 8,304 Posts
    • 13,093 Thanks
    Deep In Debt
    I used to get paid on 27th of the month and this month I was paid on 21st which is not too bad. I left this job on 30th November and also received unused holiday pay so received more than I usually would receive.

    However, I started a new job a couple of weeks ago and they pay on 31st December so I will get 3 weeks pay. I'm hoping to be able to put the majority of that into my savings but my car is due for its MOT in January so may need the money for that instead.
    Debt 30k in 2008. Cleared all my debt in 2013 and loving being debt free
    Mortgage free since 2014
    • Lauralou79
    • By Lauralou79 24th Dec 18, 1:47 AM
    • 255 Posts
    • 276 Thanks
    Lauralou79
    Gothic I'm NHS but our trust doesn't pay January's pay any earlier! Luckily I'm organised and don't use decembers pay when we get it early. January still feels like a long old month tho...
    • determined new ms
    • By determined new ms 24th Dec 18, 7:52 AM
    • 7,440 Posts
    • 44,603 Thanks
    determined new ms
    since becoming debt free and after managing my money the way I do it really doesn't make any odds to me when I get paid, except for it's the day I pay my bills and do transfers to various piggies/pots. I spend roughly the same each month without trying too hard. I generally have a small slush fund of a couple of hundred in my main account at any point in the month.
    DF as at 30/12/16
    Wombling 2017 £3016.55/Roadkill £8.73
    Wombling 2018 £145.73/RK £0.04
    • Takmon
    • By Takmon 25th Dec 18, 1:44 AM
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    Takmon
    If you have a system and stay on top of your money then early payday should never be an issue.

    Spending money directly from the account you get your wages in is a big no no in my books. I have one account my wages get paid into then have standing orders that transfer a set amount to a bills account, savings account and a weekly amount to a spending account.

    I know that I will always have enough for my bills, always save a good amount of money and can spend what I want from my spending account without having to leave anything in there for any reason.

    I'm pretty good at managing money but I would never have everything come out of one account as it may be manageable it's alot easier to separate it all.
    • Onebrokelady
    • By Onebrokelady 26th Dec 18, 3:53 PM
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    Onebrokelady
    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 wonít be any earlier.
    Originally posted by Sncjw
    I work for the NHS and our paydate is the 27th of every month,we for paid Decembers pay on the 20th this year,January's pay idndue on the Sunday so well will get paid on the 25th
    Original Debt Owed Jan 18 = £17,630 Paid To Date = £2,309 Total Now Owed = £15,321
    Emergency Fund = £1000 Xmas savings = £400
    • Onebrokelady
    • By Onebrokelady 4th Jan 19, 8:40 PM
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    Onebrokelady
    Just wanted to say thanks for this post, I took the advice and for the first time ever I haven't dipped into my December pay check and now have a healthy bank balance for January,I saved for Xmas so won't be getting a massive credit card bill this January either
    Original Debt Owed Jan 18 = £17,630 Paid To Date = £2,309 Total Now Owed = £15,321
    Emergency Fund = £1000 Xmas savings = £400
    • EssexHebridean
    • By EssexHebridean 7th Nov 19, 10:25 AM
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    EssexHebridean
    I notice that this has been "tipped" in the email this week, so although slightly earlier than usual, I'll bump it back into life as an early reminder for people. (And yes - I'll be making sure it appears again next month, too!)
    MORTGAGE FREE 30/09/2016
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    • burnleylad1882
    • By burnleylad1882 7th Nov 19, 12:24 PM
    • 27 Posts
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    burnleylad1882
    Iíve done alright this year. Bagged enough overtime in October to boost Novemberís wage right up and cover Xmas. And doing enough overtime in November so my pre Xmas pay will be large enough so I donít have to touch my pay until January. I may finally be maturing
    • EssexHebridean
    • By EssexHebridean 7th Nov 19, 12:28 PM
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    EssexHebridean
    Brilliant - well done! Now - for next year, how about building in monthly savings through the year that mean that Christmas will be covered cost-wise anyway? Then any overtime you get in these couple of months (and you won;t have to kill yourself to do it if you don't wish to, either) will go to debt-payments, savings, towards the cost of something like a holiday or similar depending on your current circumstances?

    For those in jobs where overtime is fortunate enough to be paid then using it to pay for one off expenses can be a good - if sometimes a little risky - plan - but for the majority who aren't in that position budgeting thoughout the year to cover things like that is definitely the way forwards I reckon.
    MORTGAGE FREE 30/09/2016
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    • chelseablue
    • By chelseablue 7th Nov 19, 2:58 PM
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    chelseablue
    I get paid on the last working day of the month, except for December and January when they do it earlier (December obviously because of the Christmas holiday, January I think so there's not too long a wait for people)

    This year its 23rd December, not heard about January yet
    • EssexHebridean
    • By EssexHebridean 7th Nov 19, 3:14 PM
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    EssexHebridean
    I get paid on the last working day of the month, except for December and January when they do it earlier (December obviously because of the Christmas holiday, January I think so there's not too long a wait for people)

    This year its 23rd December, not heard about January yet
    Originally posted by chelseablue
    But if people then use January's pay earlier the same thing applies only a month later - it's not actually helping people at all!

    If you do as suggested in the opening post and set aside your "early" pay until your usual payday then there isn't "too long" a wait for anyone anyway - it them becomes just another regular pay month.
    MORTGAGE FREE 30/09/2016
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    • chelseablue
    • By chelseablue 7th Nov 19, 3:17 PM
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    chelseablue
    But if people then use January's pay earlier the same thing applies only a month later - it's not actually helping people at all!

    If you do as suggested in the opening post and set aside your "early" pay until your usual payday then there isn't "too long" a wait for anyone anyway - it them becomes just another regular pay month.
    Originally posted by EssexHebridean
    Good idea, I can move it to a different account and move back at the end of the month
    • clairebeth
    • By clairebeth 7th Nov 19, 9:25 PM
    • 203 Posts
    • 170 Thanks
    clairebeth
    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!
    • B3C
    • By B3C 7th Nov 19, 9:35 PM
    • 5 Posts
    • 5 Thanks
    B3C
    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. This year, they are paying late (21st), and people are complaining already!
    • enthusiasticsaver
    • By enthusiasticsaver 7th Nov 19, 10:22 PM
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    enthusiasticsaver
    We spend within our monthly budgets and spending envelopes not the balance in our account so when we receive our pension income does not matter in the least. The budget resets on 31st monthly or 30th if only 30 days in the month. We do keep a buffer in the account though.

    Good tip for those who budget from payday to payday.
    Early retired in December 2017

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