I received an email at work today from someone today who can only be described as the “Dark Messenger of Absurd Decisions that Ruin Budgets and Hate Puppies”. Or maybe an anonymous HR person. (I guess there are two options)
This sinister email informed me that as of January 2011, all employees will be paid bi-weekly instead of semi-monthly.
Are you kidding me? Change for the sake of change isn’t progress; it’s ridiculous. And here’s the kicker: they claim they are making the change because “people were confused with the semi-monthly system.”
WHAT?! This seemed pretty simple:
“You will receive a paycheck for 1/24th of your annual salary on the 15th and last day of every month,”
and way less confusing than:
“You will receive two or three paychecks every month, with each paycheck being 1/26th of your annual salary. You will receive only two paychecks for 10 months of the year, and you will receive three paychecks in the other two months. You’ll need a calendar, a graphing calculator and an abacus to determine the months in which you will receive said third paycheck, so don’t even bother trying to figure it out.”
I pay a lot of bills every month. Rent, utilities, cell phone, student loan payments and car payments are just a few. And guess what? They are all due monthly, not quadra-weekly (which I’m pretty sure isn’t even a word)!
I try to keep the lowest possible balance in my checking account so I can invest extra money elsewhere. My biggest monthly payments are rent and my credit card (which I pay off every month). I know I’m going to pay a big chunk in rent at the end of the month, and then pay an even bigger chunk to my credit card around the 5th of next month.
Luckily, there’s always a nice helpful paycheck that comes in on the last day of the month to replenish my checking account before the credit card payment is due.
Not anymore sucka!
I don’t mean to come off as being childish. I realize there are many people who have lost their jobs and aren’t getting any paychecks. I completely understand that my issue is truly insignificant compared to what others might be facing.
It’s really not that my life is going to be more difficult because of the change. I’m just angry they changed a perfectly good system to a perfectly horrible one.
So, to my loyal, intelligent, and alarmingly good-looking readers, I ask that you help me find the silver lining. What are the positive benefits of this new schedule that I can’t see through my unhealthy rage?
*Shared at this week’s Carnival of Personal Finance
Kevin McKee is an entrepreneur, IT guru, and personal finance leader. In addition to his writing, Kevin is the head of IT at Buildingstars, Co-Founder of Padmission, and organizer of Laravel STL. He is also the creator of www.contributetoopensource.com. When he’s not working, Kevin enjoys podcasting about movies and spending time with his wife and four children.
Change for the sake of change is lame, for sure. And nobody likes change. But, getting 26 paychecks during the year vs. 24 is actually *slightly* better for you, because now you’re getting paid more often and are doing less “fronting” of money to your company. It’s kind of like the argument around getting a federal tax refund — you’re giving the government an interest-free loan.
You can earn ever-so-slightly extra interest on that money/time 🙂
Thanks Ed. I should start having my checks direct deposited into an account that earns interest (right now I get nothing from my checking account). That way I could get a little benefit from this situation.
Good looking out Ed!
I thought the same thing when I switched to a company with the every other week pay schedule. I hated it at first, but I’m actually able to use those 2 extra paychecks per year to pay off extra debt or use it for savings. I consider it bonus money.
Congrats on using that money to pay down debt. I definitely agree those two months will be nice. I just wish I didn’t have to endure 10 months of suck to get 2 months of awesome.
Quadra-weekly! Lol.
I get paid fortnightly (every two weeks…not twice a month, I’m pretty sure).
Doesn’t mean I get extra paychecks twice a year though, cause the only monthly bills I have are power and phone/internet, which add up to practicaly nothing in the grand scheme.
What a pain for you though to have to rearrange how you do things! Our company tries to get everyone to agree to monthly pay….now, that’s something that would seriously mess with my financials.
Thanks for sharing in my misery eemusings. And I’ll be hoping your job doesn’t change to monthly paychecks. I’m certain it would destroy most people’s finances and give the really financially savvy people some fits.
I agree, it is frustrating to have paychecks arrive on a different rotation than bills.
You’ll want to sort the paper bills by due date, or use a checkoff list in your computer / pda / smartphone to pay attention to what bills have to be handled by what paycheck.
That is so much work! I’m just going to keep extra cash in my checking account and stop earning interest just to make sure I have enough to cover all my bills. Fortunately I have the funds to do that. I feel bad for the people who don’t.
Hi Kevin,
I know change is sometimes difficult, but I think you would really benefit if you could learn to live off of 1/26th of your salary paid every second week. Then twice a year would come that magical “extra” payment and you could do with it whatever you please!
I get paid monthly. I’m pretty used to it since that’s how I’ve been earning my salary for the last 3 years, but some people complain about it a lot. I find it keeps things simple since a lot of my expenses and my budget are monthly.
Our bonuses come at random times of the year, which were late March and mid July for the first 2 years for me, then mid-January, May, July, and November for the following 2 years, and mid-May and mid-November beyond that.
From past experience, I would definitely take semi-monthly over biweekly. Those couple extra paychecks are just annoying. Plus, the pay days then don’t relate at all to when my rent is due, which is my biggest expense by far.