Money Talk: Managing A Monthly WagePosted: 2nd of March 2015 by
If you have just started a job or an apprenticeship it may be the first time you have had to manage a monthly wage. Perhaps in the past you had a part-time job that paid you weekly, but managing your money over the course of a whole month requires different skills and a little self-control. It is all too easy to get over-excited when that first wage hits your bank account and go out on a spending spree, only to find yourself short of cash by the end of the month.
Obviously, the most sensible thing to do is to work out your outgoings against your income first. Creating a budget to cover all of your expenses, from rent to food and travel to work, will give you an idea of how much money you have left over once everything else has been paid for. Don’t forget to put some aside as savings too, if you can, as it is always good to have some money stashed away in case of emergency.
Once you have sorted out your budget you can then break down how you spend your money over the coming weeks before next payday. A simple way to do this is to decide upon a set amount each week. Try not to overspend on any week to make sure you have enough money to see you through the last week before you get paid again.
That said, you may want to buy something larger than your weekly allowance will cover, in which case you ought to try and put the money aside and buy it at the end of the month, rather than getting it straight away when you get paid. Once the money has been spent you are not able to use it should something else come up over the month. It is far better to try and leave your big payday shopping trip until the end of the month – just before your next payday!
This will take quite a lot of self-control, as the urge to treat yourself by hitting the high street or ordering a few things online may be strong. However, if you can hold off then you will be less likely to leave yourself short at the end of the month.
That said, it is not always possible to wait on a large purchase, so you may need to readjust your weekly allowance to suit your new situation. Some people prefer to have a couple of lean weeks to make up the difference, while others will simply take the money equally from each week of their monthly allowance.
Managing your money over the course of a month does allow you some flexibility with your wages and how you spend them each week, but you should also be warned about the dangers of taking a payday loan. You will have seen these advertised on TV as a short term solution to any money worries. They also come with cripplingly high levels of interest, so you are generally better off resisting and waiting until your next pay packet comes in. In fact, with many credit cards offering zero interest on balances that are paid off within 30 days, you may actually be better off with a credit card than a payday loan (provided you pay it off each month).
Of course, any type of loan you take out – whether using a credit card or other means – is like mortgaging your future wages against having the money now. If you are already struggling to get by on your wages, having to cover repayments on a loan certainly won’t make things any easier – it is always better to save up rather than take out a loan where you can.
Managing your money over a month is a skill that you will come to terms with as time goes on, but getting into good habits early will help you to successfully manage your money month-by-month without running out before next payday!
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