December’s early payday: a dream or a nightmare?
Published 19 December 2014 by Hayley Cox
Do you find the early payday in December makes it easier for you to budget or harder? If you find it more difficult, here’s how thinkmoney can help.
It’s hard to ignore the fact that Christmas is now just around the corner, and you may already have found yourself in a frenzy of buying gifts, making plans and sorting out decorations.
Perhaps it’s lucky, then, that many employees get paid early in December so they’re not at the bottom of their pay packet come Christmas. But is this actually such a good thing?
Not such a good thing
A survey carried out by MoneySavingExpert a few years ago found that nearly three-quarters of the people surveyed by the website felt that the early December payday made it harder for them to budget.
This is perhaps no surprise, as rather than the typical one-month period between paydays, workers have to make their December pay packet stretch to cover five or even six weeks. So rather than being a helping hand, this early payday might actually result in people feeling more out of pocket than ever.
What can you do?
If you’re expecting to be paid early in December, it’s important you’re not caught short. While your income will enter your account earlier, there’s every chance that your usual outgoings like bills and other Direct Debits will go out at the same time. They might even go out twice as you wait for your January payday.
To avoid any bank charges that may result from you not having enough in your account to cover these outgoings, it’s important to budget as soon as you get your December pay packet. Work out how many times during the next six weeks you’ll have bills leaving your account and ensure you save enough to cover these. You’ll then need to manage what remains to make sure you’re not left out of pocket. Here’s a few tips for how:
• Take advantage of Christmas – the build-up to the festive season can often be expensive, but the days after December 25th may be the opposite. You might be able to stretch out the leftovers from Christmas dinner for several days, meaning you don’t have to worry about grocery shopping, plus you may have received food hampers or chocolates as gifts. Then there’s all the other presents you and the family could receive, like games, music, films and television box sets. Who needs to spend money going out when you’ve got all that to enjoy at home?
• Cut the cost of travel - if you’re worried about the amount of travel you’ll have to pay for over Christmas to see family and friends, speak to them and see if you can put the date back to after your January payday. The festive season is often incredibly hectic for everyone, and they may be glad to have one less journey to make.
• Entertain at home – As well as travelling around the country, people often find themselves heading on more nights out in December and early January. The cost of all these celebrations can soon mount up, so give your wallet a break and invite your friends to yours. If you received plenty of alcoholic gifts and chocolates for Christmas, you have all the ingredients you need for a great – and cheap – New Year’s Eve party.
How thinkmoney can help
At thinkmoney, we already help our customers budget by making sure the money they need for their bills and other regular outgoings is held back from their pay packet each month. What’s left is then transferred to their card account for them to spend. That way, they know their bills are always covered.
During December, our accounts – which charge a flat monthly fee – automatically account for the early payday. So, if you normally get paid weekly but in December several weeks’ worth go in, our Money Managers process this and set aside funds for additional bills. Meanwhile, if you’re paid monthly and get paid early in December, we’ll make sure that your bills are budgeted for over this longer period. You don’t have to get in touch to tell us of any changes, because they will be accounted for automatically.
All of this means that thinkmoney customers do not have to worry about rejigging their budgets to make sure they can afford their bills over Christmas, because it’s already been done for them. Instead, they can kick back, relax and start enjoying that TV box set they were lucky enough to find under the tree.