How often do you get paid and does it affect how you spend and budget?
I have been working a more or less full-time since 1997. The other day, I was thinking about all of the different paydays that I have had over the last decade:
- Paper check every Friday afternoon – kind of an odd way to do business. The check had all of the requisite taxes taken out, but the check was handwritten. This was an hourly job with a lot of overtime, so the amount was different every week. Most of my fellow employees “drank” most of their check by the following Monday. My employer did not even give a stub.
- Direct deposit every other month – this was a strange set-up as well. The work was sporadic, so I never knew exactly how big the check was actually going to be.
- Bi-weekly direct deposit on Wednesdays – there were two months out of the year where the dates fell so that I would get three checks instead of the usual two checks per month.
- Paper check every 1st and 15th – pretty normal. In ten years of working (part-time) for this employer, I only lost one paper check before I could make the deposit.
- Last weekday of the month – just started this one. I’m not sure what I think about it.
Technically, our pay period should not affect our budget, but I think that payday frequency can have an effect on how well the monthly budget is followed. If I had the choice, I prefer to be paid every two weeks. I think that it makes us plan our spending, but if we have problems, relief is in sight.
I find that a weekly pay period can encourage bad habits with your money. It is just too easy to waste a little here and there when you know that the next payday is just around the corner.
Currently, I am paid on the last weekday of the month. Even though our monthly take-home pay is the same whether there are one, two or four weeks between pay periods, I find that a single monthly check has been the hardest to deal with. To make things more difficult, our monthly budget is still feeling the effects of our move and our expense patterns have not quite settled into a routine. When we get in a pinch in the middle of the month, it is too easy to look to a credit card for a temporary fix. I plan to spend a day in the near future to bring back budget discipline. The FNBO Direct online billpay has help to bridge some of the gaps. Having our bills paid from our savings account helps us to maximize float interest and smooth over small budget surpluses and deficits.
Does the timing of your payday affect your budget habits?