Cash - Beware the day after payday!

CASH 1 - Beware the day after payday!

Day after payday – All direct debits have gone out and I’ve still got £1,400 to spend, whoop whoop! Need to hold back £500 for shopping and stuff but still easily enough headroom for me to go online and order those snazzy new £300 wheels for the road bike – reduced from £450!  Here we are, proceed to payment and CLICK!, good times!

Payday + 6 – Ouch forgot about the TV licence renewal, oh well, just need to tighten the belt a bit and everything will be fine and dandy.
Payday + 11 – “But I thought you’d already paid the final instalment of her school trip!”
Payday + 16 – “Yeah, yeah I know his birthdays next Friday and the present needs to be sent to Australia”
Payday + 21 – “Well at least you missed the cat love, I’ll take it down to Quickfix and get two new tyres......ahh gonna need a new exhaust as well”
Payday + 26 – Oh Christ, I forgot I paid for that on the credit card.

Sound familiar?  It represents my previous August when I ended up stratospherically over my overdraft limit with a £20 charge and a raft of daily interest payments as the cherry on top of a thoroughly non economic cake of a month. As a qualified accountant I really should know better, but somehow I regularly fall victim to a potent ‘payday + 1’ cocktail of selective creditor recall, frugality aversion – aka ‘L’Oreal!’ syndrome – and staggeringly unrealistic optimism that nothing will break/crash/run out/disappear in the month ahead.

There is thankfully a readily available solution in addition to the blindingly obvious one of paying as many things as possible by direct debit on payday + 1.  This simply involves only having a payday + 1 mentality on payday – 1 if you follow.  So rather than pressing CLICK on those super sexy slim-line bike wheels on June 2nd, I now hold off until the evening of June 29th, when if, astonishingly, I still have £300 in the bank, I can proceed to payment safe in the knowledge that I’m only now 4 hours away from the next ‘now you see it now you don’t’ pay cheque. 

If meanwhile I’m still in the money on the 29th but with no super-essential spending requirements[1], then I transfer any residue into my ‘shit happens’ savings account, the name hopefully speaks for itself.

So postpone your P + 1 mindset until P – 1 and rest assured that if nothing else your bank manger will still love you.

[1] And for the avoidance of doubt the purchase of £450 bike wheels for a mere £300 will always be essential