My wife is an educator and she normally gets her paycheck on the last day of each month. But, in November and December, she gets her paycheck a couple of weeks early, due to the fact that school will be out for Thanksgiving and Christmas holidays. In the past, we would look forward to this “early money”, because we were living “paycheck-to-paycheck”. But, inevitably, when January rolled around, we would be struggling to make it to January 31st! November’s and December’s paychecks would have long-been-spent, and we’d be using our credit cards to help fill the “paycheck gap”.
Sound familiar?
If you get your paycheck a few weeks early, be careful! Do not treat this money as a “bonus” and go crazy. I know folks who will spend every dollar of their December paycheck before January 1st – and then they have to go through all of January, using credit cards to ‘make ends meet’. This ‘strategy’ (or lack thereof) will put them behind for an entire year!
Now, because we have an emergency fund and a budget, it really doesn’t matter to us “when” we get paid. Our budget is based on our annual salaries, and bills are broken down into monthly categories. So, even though we might receive a paycheck on the 21st, money from that paycheck will not be allocated for expenses until the 31st.
Using a budget helps to keep things in perspective!
If you are looking for an easy-to-use budget solution, consider the YNAB Personal Budget system. YNAB is a spreadsheet-based system that I’ve been using (with great success) for more than 2 years. (YNAB has been a sponsor of No Credit Needed for more than 2 years – and I proudly promote it!)
If you want to read more about creating a budget, check out a few of these articles I’ve written:
My wife is also an educator but she gets paid on the 5th and 20 of every month so we don’t have to worry about this. I remember a few years back when I used to work for a community college and they did the same thing with their paychecks at the end of the year, it was very frustrating.
Great post!
I love YNAB and they have a wonderful community to pose questions and to hold you accountable for your goals.
Thanks, I’m going to pass this on to my mother. She gets paid on a monthly basis and this issomething that could happen with her.
Hi NCN,
A Christmas fund and a well-planned budget does make things more easier when it comes to paying for regular expenses and at the same time doing something extra to enjoy the festive season.
As for me, I usually prefer a Christmas club account wherein I can keep aside some cash every month when i get my paycheck. And, I attend the post-Christmas sales thereby buying a lot of stuff at a cheaper price compared what they’re sold off just before the Christmas. I’ve just sorted out what I need to keep in mind and what are the things that can help me stay cool an frugal at the same time helping me control my expenses. Take a look at the 51 Tips on a stress-free Christmas at http://www.mortgagefit.com/budgeting/51tips-christmas.html
Merry Christmas!
Jessica