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  • FIRST POST
    • TobyGShepherd
    • By TobyGShepherd 17th Sep 19, 9:49 PM
    • 3Posts
    • 0Thanks
    TobyGShepherd
    Paid weekly but bills are monthly
    • #1
    • 17th Sep 19, 9:49 PM
    Paid weekly but bills are monthly 17th Sep 19 at 9:49 PM
    Hello,

    Iím currently adjusting to the world of weekly pay and itís boggling my mind when it comes to bills.

    If I get paid £320 a week and my monthly bills are £500

    Thatís £1280 per every 4 weeks minus £550 which leaves me with £730 spends for food, petrol, etc.

    My bills come out on
    1st £250
    3rd £40
    17th £33
    23rd £60
    25th £95
    26th £71

    I have two current accounts and I get paid into the one where my bills DO NOT come out of. So my question is...

    If I transfer (standing order every Friday) £150 per week into my bill account, will I always have enough in there for my bills if they stay the same and I wonít have to transfer more? I ask this because towards the end of the month more money is due out than the middle of the month.

    Any written calculation would be appreciated!
Page 1
    • bsms1147
    • By bsms1147 17th Sep 19, 10:03 PM
    • 2,046 Posts
    • 3,642 Thanks
    bsms1147
    • #2
    • 17th Sep 19, 10:03 PM
    • #2
    • 17th Sep 19, 10:03 PM
    When being paid monthly some will recalculate their income based on what would be the equivalent monthly salary. Yours would be equivalent to £1386 a month.

    Others will use their 4-weekly income as their 'monthly' income, budget to that, and then have one extra 'month' of income which would feel like a bonus (as there are 13 4-weekly periods in a year).

    £150 a week into the bills account would cover your bills as that would be equivalent to £650 a month, which is more than enough to cover your bills with some spare.

    Your most expensive 7-day rolling period would be a week that includes the payments on 23rd, 25th, 26th and 1st of the month (ie which could fall like that at the end of a February month) - the total for that period is £476.

    I would ensure you had a buffer of ideally this amount (£476) in the bills account to start with, and then an additional £150 going in weekly - the buffer made possible if you have some savings or a frugal month to start with. Your bills account will increase in balance by about £100 a month (as £650 going in, £550 going out). Alternatively you could send £127 a week and it would cover it exactly and the balance would remain static month by month.

    Ideally you want to be able to separate your income from your outgoings in this way so that as long as you have a buffer in your bills account it doesn't matter when or how frequently you get paid, whether monthly, weekly or even daily.
    Last edited by bsms1147; 17-09-2019 at 10:43 PM.
    • IvanDP
    • By IvanDP 17th Sep 19, 10:35 PM
    • 92 Posts
    • 43 Thanks
    IvanDP
    • #3
    • 17th Sep 19, 10:35 PM
    • #3
    • 17th Sep 19, 10:35 PM
    Hello,

    Iím currently adjusting to the world of weekly pay and itís boggling my mind when it comes to bills.

    If I get paid £320 a week and my monthly bills are £500

    Thatís £1280 per every 4 weeks minus £550 which leaves me with £730 spends for food, petrol, etc.

    My bills come out on
    1st £250
    3rd £40
    17th £33
    23rd £60
    25th £95
    26th £71

    I have two current accounts and I get paid into the one where my bills DO NOT come out of. So my question is...

    If I transfer (standing order every Friday) £150 per week into my bill account, will I always have enough in there for my bills if they stay the same and I wonít have to transfer more? I ask this because towards the end of the month more money is due out than the middle of the month.

    Any written calculation would be appreciated!
    Originally posted by TobyGShepherd

    Like yourself, I am also paid weekly, but do not work exactly the same number of hours every week (so no 2 weeks are the same)
    So, I have found an approach that works for me.

    Account 1: All money in and all bills (including day to day spending and saving) out
    Account 2: Day to day spending (same amount every week no matter what goes in)
    Account 3: savings (again, same amount every week)

    All of the income and outgoings were worked out on the basis that I will work 39 hours every week, although this can vary from 39 up to 50
    For the first couple of months, all of the excess was left in the main account in order to build up a buffer in case of emergency, now any excess is transferred into the savings (apart from the original buffer)

    I know this is a very simplistic system, but it works for me
    • blue.peter
    • By blue.peter 18th Sep 19, 9:37 AM
    • 40 Posts
    • 16 Thanks
    blue.peter
    • #4
    • 18th Sep 19, 9:37 AM
    • #4
    • 18th Sep 19, 9:37 AM
    If I transfer (standing order every Friday) £150 per week into my bill account, will I always have enough in there for my bills if they stay the same and I won’t have to transfer more?
    Originally posted by TobyGShepherd
    Not necessarily. It depends when you start. I've just created a little one-month spreadsheet, based on the arbitrary assumption that you start paying in on the 1st of a month. In this case, you'd start off with a deficit (£150 - £250 = -£100 on the 1st, then -£100 - £40 = -£140 on the 3rd. You'd then get back into credit on the 8th, and not get into deficit again that month.)

    I suggest that you try creating a similar spreadsheet, based on an accurate start date for inputs and a longer period. This'll soon expose any shortfall.
    Last edited by blue.peter; 18-09-2019 at 9:41 AM.
    • eklipze
    • By eklipze 18th Sep 19, 9:45 AM
    • 36 Posts
    • 213 Thanks
    eklipze
    • #5
    • 18th Sep 19, 9:45 AM
    • #5
    • 18th Sep 19, 9:45 AM
    Pretty much the same as has been said above. If you want a monthly standing order , then you need to have a 'suggested' buffer of one months outgoings in the account, that way you'll never be low, especially in the first week when outgoings are higher than the incomings.

    Or ... this buffer could be covered with a £500 free overdraft ?

    Best way in my opinion is create a spreadsheet for all 52 weeks of the year, and work out what will be outgoing each week. Then on payday just manually transfer exactly what you'd need for bills next week.
    It's way easy enough to do this via internet/phone or app.

    This way you plan the year ahead and can see which weeks you may have to put more in and which weeks you'll need less, you can then plan to compensate for this difference over a couple of weeks before.

    This will give you a far more detailed view and should help budget if required.

    I used to get paid every 4 weeks but monthly out goings so I had a spreadsheet for the year to see which month was my 'bonus' month. I even had it down to a pretty good estimate of what my pay would be month by month depending on projected oncall payments and overtime worked in the month.

    Didn't take much work, gave me a good view of the year ahead.
    • trailingspouse
    • By trailingspouse 18th Sep 19, 11:13 AM
    • 3,797 Posts
    • 7,264 Thanks
    trailingspouse
    • #6
    • 18th Sep 19, 11:13 AM
    • #6
    • 18th Sep 19, 11:13 AM
    I get paid from a variety of sources, on a variety of time scales. All my ins and outs are from the same account.



    I know how much comes out of my account every month, so I make sure that there is always that amount in the account, as an absolute minimum.



    So, on my 'biggest' pay day, I look at how much is in the account, and put any surplus over and above my regular outgoings plus an arbitrary amount for discretionary spending into an easy-access savings account. Then I check the account regularly and if I drop below my 'regular outgoings' amount I have a quiet word with myself and transfer whatever is needed out of the savings account. Over time I'm getting better at knowing how much I can sensibly put into savings each month.


    At the moment, I'm slightly below the amount I need to have in my main account, but I also know that the next regular payment won't be going out until 26th - and I will be receiving another income payment amount on 25th which will mean there's going to be enough in the account by the time the payment comes around. I will of course keep an eye out just in case that expected payment doesn't happen for whatever reason, and transfer funds if I need to.


    I also find that it helps to put day-to-day expenses (food, fuel etc) on a credit card - I then know how much the credit card payment will be for the next month and it's easier to budget - you're effectively turning all of your little spends into one monthly spend. This only works if you are going to pay off the credit card in full every month.


    I find a spreadsheet really useful to project what my income is likely to be versus my outgoings over at least the next 6 months. It's also a way of easily seeing when the big annual bills will arrive and roughly how much they will cost me, so I'm ready for 'em (that's where the savings account comes in).
    • blue.peter
    • By blue.peter 18th Sep 19, 12:06 PM
    • 40 Posts
    • 16 Thanks
    blue.peter
    • #7
    • 18th Sep 19, 12:06 PM
    • #7
    • 18th Sep 19, 12:06 PM
    PS to my earlier post.

    A long time ago, I learnt that it's helpful to project my income and expenditure. Over the years, I've used various things from Filofax Bank Account pages (in the mid-80s) to AceMoney (now). Obviously, the last of these is more sophisticated than the spreadsheet already suggested. Equally, though, I find it easier to use and more helpful. In particular, it automatically sorts entries into chronological order.

    AceMoney has a scheduling function that allows automatic entry of recurring payments and deposits, and shows the next month of those (greyed out) in the relevant accounts. This allows me to look ahead and ensure that there's always enough available to pay the bills, and to know how much I can skim off into savings. You might find something of this sort helpful.

    I expect that there are simpler (and cheaper) equivalents available for use on smartphones if that's what you prefer. (For several years, I used Easy Money on my Android phone, but that one appears not to be available any more.)

    I see that one or two people have suggested keeping a buffer of at least one month's outgoings in the relevant account. That's a good idea. One corollary to this approach is that you know that if the account balance ever exceeds the amount required for a month's outgoings, you could skim off the surplus and put it into a savings account. Maybe that would pay for a holiday?

    By the way, I used a two-account approach like yours from the mid-80s to the early 90s. Although I was monthly paid, I had quarterly gas/electricity/phone and (if memory serves) water bills, and half-yearly mortgage payments.

    After decades of monthly pay, I now find myself in a position similar to yours. All my direct debits are now payable monthly, but I have a couple of private pensions, paid on different dates. AceMoney really helps me keep track.
    • PasturesNew
    • By PasturesNew 18th Sep 19, 12:10 PM
    • 67,259 Posts
    • 394,244 Thanks
    PasturesNew
    • #8
    • 18th Sep 19, 12:10 PM
    • #8
    • 18th Sep 19, 12:10 PM
    I used to do a spreadsheet for at least the next year for bills, income. To do it like you, with weekly/bills is just nuts... it'd not take much to tip it over.

    I had a big month in April when I'd pay the council tax in full, the car insurance, the car tax, have the car MoT'd, so that was always a £2k month.... so needed ~£180/month to be adding up for that time.

    Also: I paid my council tax in full on 1 April because I figured if things did change mid-year that'd give me breathing space as it's the biggest monthly bill that goes out. I always prefer to pay everything in full, up front, where possible, for that reason.... you are possibly buying future breathing space.
    • Terry Towelling
    • By Terry Towelling 18th Sep 19, 7:30 PM
    • 1,988 Posts
    • 1,680 Thanks
    Terry Towelling
    • #9
    • 18th Sep 19, 7:30 PM
    • #9
    • 18th Sep 19, 7:30 PM
    I don't understand why it should be a problem.

    You can do exactly as you suggest (£150 per week into the bills account) as long as there is a £300 buffer in the bills account at the end of the previous month.

    On the basis that you switched from monthly pay to weekly pay with no interruption (i.e. only one week between your last monthly pay and your first weekly pay), your old monthly regime should have paid a full month's bills contribution into the bills account to cover your first month of weekly pay.

    If there was a hiatus between the two pay regimes, that will change things, but all you need to do is ensure there is enough in the bills account at the end of any given month to cover at least the payments going out on 1st and 3rd of the following month. Your £150 weekly contributions should then be (more than) enough to meet the ensuing month's demands.
    • enthusiasticsaver
    • By enthusiasticsaver 19th Sep 19, 12:01 AM
    • 9,239 Posts
    • 21,534 Thanks
    enthusiasticsaver
    Hello,

    Iím currently adjusting to the world of weekly pay and itís boggling my mind when it comes to bills.

    If I get paid £320 a week and my monthly bills are £500

    Thatís £1280 per every 4 weeks minus £550 which leaves me with £730 spends for food, petrol, etc.

    My bills come out on
    1st £250
    3rd £40
    17th £33
    23rd £60
    25th £95
    26th £71

    I have two current accounts and I get paid into the one where my bills DO NOT come out of. So my question is...

    If I transfer (standing order every Friday) £150 per week into my bill account, will I always have enough in there for my bills if they stay the same and I wonít have to transfer more? I ask this because towards the end of the month more money is due out than the middle of the month.

    Any written calculation would be appreciated!
    Originally posted by TobyGShepherd
    £150 a week will work to cover the bills providing you start paying in around the beginning of the month rather than the end to allow a buffer to build up. I would project the figures on a spreadsheet but as an example I have projected your month 1 figures below assuming a start date of Friday 4th October after your £250 and £40 bills have gone out and assuming the account starts from a nil position.

    Friday 4th October £150 goes in giving a credit balance of £150

    Friday 11th October £150 goes in giving a credit balance of £300

    17th October your first bill of £33 is deducted leaving £267

    18th October your payment of £150 goes in giving you £417

    You have bills of £60 (23rd) and £95 (£25th) coming out that week leaving you with £262

    25th October your £150 weekly payment takes you up to £412

    26th October your last bill of £71 is paid giving you an end of month balance of £341 which is enough to cover the £250 and £40 bill due at the beginning of November and a further £150 is due in then.

    Over the year you will build up a bigger credit balance because 52 times £150 is £7800 and your bills come up to £6600 (12 times £550) giving you a £1200 buffer.
    Early retired in December 2017

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages and Endowments, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
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