YOUR WEEKLY MONEY DILEMMA
Getting paid monthly for the first time, how to budget when had fortnightly pays my whole working life
I have two words for you... feast & famine.
So many people I have helped have really struggled with monthly pay (especially if they had always had fortnightly in the past).
When I worked at an investment bank, getting paid monthly - even for people in finance, was something they found hard– evidenced by the amount of lunches being bought at our café the week of payday then the office cleared of free fruit and biscuits by 8am every day the week before payday. It was a fascinating and very observable cycle.
Some thoughts:
• Make sure you know exactly when payday happens. Is it the same day, like the 15th of every month? If so, some months will have 4 weeks, and some will have more, so that needs to be considered.
• In the beginning, you may need to dip into savings, especially as often it's paid 2 weeks in advance and 2 weeks in arrears, so your first pay will likely not have the full month's pay. It can be really tricky in the beginning, especially if you have a large payment due, but building up a buffer is essential otherwise you’re going to feel like you are going around in circles.
• Having a solid cashflow plan becomes vital when you are being paid monthly, I believe having a weekly spending allocation works well here. Paying yourself an amount of money for discretionary spending, on the same day every week will take away that feast-and-famine behaviour that monthly pay cycles often produce.
So, carve some time out and build a solid cashflow plan, know when your payments are due in the month so you can plan ahead. Once you get this sorted (knowing, in the beginning, you might need to take money from emergency savings), you will be able to manage it well.
It took me a while to get my head around it at first, but in the end, I actually forgot when I got paid. Not because I didn’t care - because I had everything separated and automated, and it worked for me without any manual effort. All I needed to care about was my weekly allocation, then I knew my bills and goals were sorted!
Have a money dilemma?
Money dilemmas can be a nightmare! They can leave you up all night ruminating about what to do, have you feeling alone and isolated or just plain ol' stuck. So, we are here to help. I am going to tackle one a week and give you my unbiased, no BS general thoughts on how to tackle your conundrum. We would love for you to send yours (or someone you know) in.
Obvs all of this is general advice only... especially important to note any and all of the comments above do not take into account your objectives, financial situation or needs. Before acting on any information, you should consider the appropriateness of the information provided and the nature of the relevant financial product having regard to your objectives, financial situation and needs.
