monthly pay cycle

Why Monthly Pay Cycles Suck (and How to Make Them Suck a Little Less)

The change from getting paid weekly to monthly took a bit of getting used to. Granted, my last job paid me by cheque. An actual physical cheque that I’d have to go to the bank and cash in every week and an extra one to send off to my super company every month. So, I’m just grateful to be paid by bank transfer now, however frequent it may be.

But getting paid monthly is no easy task.

There’s the obvious temptation of living like a king, going on a spending spree and enjoying lavish nights out for the first week, while counting coins and living off two minute noodles the days before the next pay run.

There’s also the annoyance of getting hit with a bill or rent that’s due right before pay day.

Sure, fortnightly and weekly pay cycles can make budgeting a little easier, but living pay check to pay check is still a problem. Here are the tricks I’ve learnt to make sure there’s more money than days between each payday.

Line up bills

Whether it’s credit cards, phone bills, rent, health insurance or other direct debits, it makes sense to schedule these for the same day you get paid. This makes it easy to manage and ensures there aren’t any bills that creep up once you’ve spent all your cash.

It’s usually possible to change the regular due date to whenever suits, just call and ask.

Save first

The worst approach to saving money is spending what you have and saving whatever is left over.

Usually there’s not much, if anything, left because people have a tendency to spend whatever’s there. Set up a direct debit system which takes money straight out of your account on payday and puts it into another savings account.

Budget or bust

The most important tool to managing your money is a budget which tracks incoming and outgoing cash. It helps work on those self-control skills too – that new jacket/bike/pair of shoes might look nice now, but do you really need it?

If you can afford it now, but won’t be able to eat in two weeks, it’s time to reconsider.

Image courtesy Online Trading Academy