6 helpful hacks for handling your money on payday
Everyone looks forward to payday. As soon as you reach the second half of the month, you have one eye on your next pay packet, and are already planning all the things you’re going to do with your wages.
But there’s nothing worse than getting to the end of the first week in the new month and realising your wages have been decimated. When you’re feeling flush, it’s all too tempting to blow the lot, but you always regret it later.
That’s why we’ve put together a list of six helpful payday hacks that allow you to protect your pay packet and make your money go further.
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1. Pay your essentials on the first of the month
Everybody knows that you should always pay your essentials first – whether that’s your rent, your council tax, or your broadband bill. But the longer your money from payday stays in your bank account, the more it will start to burn a metaphorical hole in your pocket.
That’s where the ‘first of the month’ rule comes into play. Contact all of your providers and ask them to take the money you owe them from your account on the first of every month (if you don’t get paid at the end of the month, then adapt the rule to pick a date that suits you better.
While it may seem like a buzzkill to have your bank balance decimated by mortgage companies and internet providers as soon as it arrives in your account, the first of the month rule does come with its advantages.
Once you’ve paid for all your essentials, every penny that’s left in your account is yours to play with, whether you want to go on a shopping spree, head to your favourite restaurant, or even keep some money for a rainy day (more on that later). Plus, dealing with your essentials first means there will be no nasty surprises later in the month. Your parents would be proud.
2. Use direct transfers to your savings account
Similar to the previous point, we’re all familiar with how standing orders work. You set up a regular payment of the same sum of money, and arrange for it to leave your bank account on the same day each month.
We’re used to the idea of our standing orders going to other people – banks, building societies, phone companies – but have you ever considered setting up a standing order to send to yourself?
That’s our next hack for payday – setting up a standing order to your savings account on payday. That means as soon as your wages land in your account, you send a portion directly to your savings account.
For this hack to work, it’s important you pick a reasonable amount to go to your savings each month. Too much and you’ll find yourself dipping into your savings every month; too little and you won’t feel like you’re achieving anything.
The genius of this hack is that it shows you take your savings seriously. By paying into your savings first (after paying your bills, of course) you’re treating them like an essential cost, something that comes out of your bank account each month no matter what.
3. Lock up your savings and throw away the key
Sending a portion of your wages to your savings account on payday is the easy part. The hard part is making sure that money stays there throughout the month. That’s where online bank Monzo comes into their own with their locked pots feature.
By opening a current account with Monzo (it’s completely free and takes minutes) you can divide your money into separate ‘pots’ – pockets of money kept apart from your current account for any number of reasons, from priority bills to a holiday savings fund.
But the real genius of pots is that you can lock them. Monzo lets you lock the pot until a certain date, like the week before your holiday if that’s what you’ve been saving towards. You’ll be able to add money to the pot as normal, but you won’t be able to withdraw any until your holiday comes around.
Monzo even helps you save money more with automatic saving. Many of us like the idea of saving money, but it’s much harder to actually go through the process of putting money away rather than spending it.
With automatic saving, you don’t need to think about it. Any time you make a purchase with Monzo, you can choose to round up your transactions to the nearest 10p or 50p, and send the spare change to a savings pot. This allows you to save little and often over an extended period of time, and you will barely notice the difference.
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4. Break out the banknotes
It used to be that people were worried that if they lifted money, they would simply fritter it away on nonsense. It was safer left in their bank account. In our contactless world, that’s no longer the case.
There’s no denying contactless payments have made life easier in many ways, especially during 18 months of a global pandemic where zero-touch retail became even more important.
Whether you’re using your card or your phone, you can simply take out the device, tap it, and hey presto, you’ve paid. But whether making it that easy to spend is a good thing is debatable.
Everyone’s been guilty of tapping without thinking on a trip to the shops or in the pub. But the little things build up. Before you know it, you’ve spent more money than you have, and you don’t feel as though you’ve got anything to show for it.
That’s where the much-maligned banknote really comes into its own. While some of us might have forgotten that notes exist, they’re still around, and lifting cash for the month on payday is a great way to help you cut costs.
Banknotes are your money in physical form, and there’s something about actually seeing how much you’re handing over the till that will give you pause the next time you reach into your pocket. Do you really need the thing you’re forking over so much cash for?
5. Adopt a ‘Sleep on it’ approach
Impulse buying has murdered many a pay packet. You know the feeling: Your money arrives on payday and you’re feeling flush. You head out to pick up a couple of things and stop dead in your tracks – those trainers, the trainers. One look and your money is as good as gone.
Act two of the impulse buy involves seeing the trainers in a new (unflattering), losing the receipt, and then losing the will to live.
That’s why you should always remember to sleep on it. If you’re looking to protect your pay packet, any item you have your eye on that will cost you over a certain amount (£50, £100, you choose), you should make a conscious decision to wait 24 hours.
It doesn’t matter whether the extra day of meditating causes you to cool off, or the next day you’re back at the same store with a pounding heart and cash in hand. What matters is that you haven’t jumped the gun. You’ve taken the time to consider whether you really want the item, so whatever you decide is a win-win.
6. Build a budget for eating, drinking, and socialising
Who doesn’t love some organised fun? It may seem a strange notion, but one of the most helpful hacks for payday is to make a rough sketch of how much you’ll spend that month on things like clothes shopping, eating out, meeting up with friends – you know, the fun stuff.
We’ve all reached that point bang in the middle of the month, at the furthest possible point between paychecks, where we realise we’ve stretched our money to breaking point on nights out. Next thing your phone buzzes, you realise people are heading out again, and you’re left with the choice of missing out or dipping into your savings.
That’s why it’s a good idea on payday to map out what you know you have planned for the month, and organise your budget around it. Try spreading your socialising and spending over the course of the month. If you’re getting a haircut and going for a drink one week, maybe save the trip to your favourite restaurant for the following week.
And try not to fall victim to FOMO – nobody wants to sit it out when their friends are heading to the pub, but when you’re the person who just can’t say no to a day out, you may find the decision taken out of your hands. It’s hard to go to the pub when you’re tight for cash.