Many of us have been paid weekly, fortnightly and monthly (and even job-by-job) and the shift from one pay cycle to another doesn’t always come easy.
This article has been sponsored by Bankwest.
There are a few adjustments which could help you prepare for each change, and, after time, they’ll become banking no-brainers in your daily financial flow.
First, do not get overexcited by what seems like a substantial amount entering your bank account. It’s very easy to see it and splurge, absolutely, but remain calm.
You may want to allocate your weekly expenses, like rent, so that you don’t find yourself in a pickle in week four or even week three of the monthly pay cycle. Some like to look after weekly expenses all in one hit, so that there’s no room for error down the line, by immediately deducting it into another account, and having that account do the weekly transactions in the background. The alternative is setting up weekly deductions to your landlord as normal, but you’ll really need to trust that the money will be there every week.
The good thing about monthly pay, and there is one, is that there are a lot of things you’re probably paying for that come out by month, like gym and Spotify memberships, or your phone bill and insurance. There’s so much less brain work required here for that reason, unless it happens to come out somewhere rogue in your pay cycle.
If that’s the case, what you’ll want to do is work out when all these deductions happen in the cycle and what they total to, so that you can do the immediate deduction at the start of the month like you do rent. That amount can go into a separate account that will similarly do the deductions for you in the background.
Another good thing about this is that you can get an overall picture of how much your subscriptions and such are costing you all up, and where you could probably be saving. Because once you make all these deductions at the start of the month, how much do you even have left for, you know, life?
Again, the amount that comes out of your account can seem like a decent number, but remember it needs to last you a little longer than your average week (double, actually).
This could be the trickiest of the three as you may be trying to manage both weekly payments and monthly payments with this weird in between area. Not many deductions happen fortnightly, but you can set it up that way with utilities and landlords if they’re agreeable. There’s less chance of getting overexcited and going on a spree that way too – depending on your personality type, of course.
When it comes to weekly costs, that’s easy enough – just do the bulk deduction for the fortnight into the separate account and let it do the weekly transfers in the background.
For the monthly deductions, it’s about looking at your most recent statement and finding the dates and costs of all these expenses. Which costs sit in fortnight one and which costs sit in fortnight two? Which week of the fortnight? These are all important in making sure one week/fortnight isn’t lush living and the second barrel-scraping.
If the expenses for one fortnight vs the other fortnight are unbalanced, well, you don’t want that. Can one of the services shift the date for you? Do you need that service? Work out what’s possible for a less chaotic lifestyle.
Ah, nice. Weekly is perhaps the best and least anxiety-inducing of the lot. There’s a lot less brainwork required for all these flying expenses and different time deductions, but the monthly costs can cause a spanner.
As mentioned above, you may want to work out when those deductions are scheduled for the month so you’re not living it up one week and crying in the corner the next. If the services can’t change to weekly charges, then you can just overtake that with your own financial knowhow and prowess.
Consider creating that separate account, and divide these service and subscriptions costs by four so that it’s coming out in instalments rather than substantial hits. Think of it like buy-now-pay-later services – you hardly know it’s even happening when it’s staggered.
Bankwest’s App, for example, allows you to create multiple accounts or “buckets” to allow all this financial delegating and background work. You can even rename them to what suits you, like “Monthly subscriptions”. Maybe you want one called “rent”, where roommates can transfer their rent in by the cutoff date, and it has scheduled transfers to the landlord.
It makes the burn of rent much more bearable.
This is why you might want to have all of the above deductions happening the day after your pay comes through. You can’t miss money that you *technically* never had, right?
Of course, all these tips don’t take your objectives or financial situation into account and you should seek relevant professional advice.