Payday Spending

It’s Friday and you finally got paid! Time to take that paycheck to the bank and get it cashed and treat yourself. Actually that’s probably not what you are doing in today’s world. Most likely that paycheck it is getting direct deposited into your checking account and you are seeing your account balance using your mobile bank application. You don’t even have to wait until Friday either, as you know the funds will actually be deposited at 12:01 AM, right after midnight. And then you’ll use either your credit or debit card to treat yourself to a nice dinner and some drinks. Sounds like a nice night out, doesn’t it? You aren’t going to have that money after paying all your bills for the month so you might as well spend it now!
Unfortunately this is the exact opposite of what should be done if you are trying to be financially responsible. Bills and expenses should always be put first, and then any extra money can be used to treat yourself. But I still think this should go a step further and when you “pay yourself” you should be setting a certain percentage of your money aside for savings or investments. If you have any debt that should also be your #1 priority to where your money is going! Only after that do I think it’s a good idea to treat yourself and use your fun money depending on your situation – not with payday spending.

I would actually take it a step further and say that if you have a well though out budget (or are good at keeping your spending down and tracking your money for those that don’t use actual spreadsheet budgets) your actual payday should end up not mattering to you! You should have an emergency fund set aside for at least a few months of expenses in case anything comes up, and you should be “working off” your last paycheck and not waiting for the next one to make a purchase.

There are obviously exceptions to this and nothing is set in stone, other circumstances and unplanned emergencies may arise too. You may have $50 budgeted for eating out or for entertainment each paycheck or each month depending on how you budget. If you spend that money right away on the 1st of the month, but have a solid budget otherwise it doesn’t mean that you are throwing away your money and not paying your bills. It just means that your eating out budget has been used up for the month. You do have to wait for your next paycheck or the next month to spend that money again, but you have already set aside the money for the important things like bills.

Sometimes it is hard to justify not spending that money when you get it when you are locked into this cycle. You might have people around you that do the same and would wonder why you aren’t able to join them to go out for the night. Some people also have a hard time saying “no” to a family member that may be constantly asking for money, and I can understand that. But if they have the same destructive behavior there is a time when you do have to say no. The person might think if I blow through this money, I won’t have to say no now because I’ll be in the same exact situation then. If I spend all my money and am just as poor, they won’t come to me for money anymore. The valuable lesson here would be to learn to say no yourself and also teach that person about budgeting for themselves so you will both be better off in the long run.

If someone tries to suggest otherwise or even while reading this post you might think to yourself that “It’s my money I can spend it exactly how I want!” Of course this is always true, but I would still recommend trying to save that money instead of blowing it right away and see how it goes. Try to get into a new cycle and habit of watching your wealth build instead of shrink. I promise that it can be as equally gratifying as spending the money.

If you are able to delay your gratification it makes things all the much better for you. Having an emergency fund and a buffer for spending gives you peace of mind and will lower stress over money, which I think is much more valuable then splurging on your payday. When you have that buffer, if a friend does ask you to go out way after your payday you can say yes right then and not have to worry in the back of your mind if that last drink you bought is going to make it so you can’t buy food this month. And if you go out too many times that month? Just tell your friend next time you have gone out to eat too much lately and you are cutting back a little this month. When you build your emergency fund back up to the level it should be at and have your budget set for that month, you can be the one asking to go out. Or better yet – you can invite people over for a meal and have them bring their favorite drinks in addition to yours. Much more cost effective and still a good time.

Have you ever been in the mindset that you need to spend your money before your bills take it away? How did you break out of the habit of payday spending or are you still in the habit?

Photo Credit: michaelgoodin via photopin cc


    1. Yeah, I was never really one to go crazy on payday either but maybe that was because I didn’t have a job that actually paid that much haha. I was always pretty good with money though, making sure I had enough to pay car insurance at the end of high school and throughout college. My savings didn’t grow that much because of the car insurance payments though. I spent a decent amount of money going out but I never really blew through money.

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