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Discussion in 'Off Topic' started by her209, Jun 9, 2008.
The more pay periods the better imo. If I could get a direct deposit daily at my job then I would.
Early in my career, I got paid every 2 weeks. For a young, dumb kid, it helped my poor budgeting restraint to get two "extra" checks per year (versus twice per month). I used those checks either for major bills, to save, or vacation. I know several people well into their forties who prefer to be paid that way for the same reason. If it works for them, then more power to them.
I used to get paid once per month. You beat it by carrying a buffer of a month+ of expenses (not disposable) in your account at all times. That was also the first significant salary I ever had, and it was wild to be "rich" for about 2 or 3 days, til the mrotgage/studentloan/car/etc all came out. Then 3 weeks of poor... etc.
I like every two weeks. I then base my monthly budget off the "two pay period" month. The extra money is really just for that bullshit that doesn't appear in the budget but you get slammed on anyway.
The answer depends on when you get your first paycheck in the every 2 weeks scenario. This can range from January 1, to January 15. I did the calculations with 3% interest, compounded daily, and couldn't get the exact value you got ($1.24 for any date), I probably did something wrong with my interest calculations
I got a difference of 29.06 if your first paycheck is January 1st (eg if you worked last year, and last got paid 12/18 in the paycheck every 2 weeks scenario). If you assume you started work Jan 1st and got your first paycheck Jan 15, you actually lose a cent in interest compared to the semi-monthly pay scale, because you get your first check the same day in each scenario, but the paycheck is bigger in the semi-monthly scenario. If it continued for more then a year, the every two weeks paycheck would catch up shortly into the first year.
It's the same. Your difference in interest on that money assuming you still have bills to pay is going to be something like a dollar a year.
That said, I prefer bi-weekly because then there are 2 months a year where I get a fake bonus which is nice to see my savings/investments jump by that "extra" paycheck.
First off, Bi-Monthly technically means every 2 months and Semi Monthly means twice a month. However after decades of people using it interchangeably, it has become accepted. but that still doesn't mean it's right...
Anyway, Getting paid every other week can be nice psychologically because twice a year you get paid 3 times per month so it seems you are getting extra, but in the end, it all evens out. Your salary is the same, they just divide up the payments differently. If there is a difference, it's pretty minor by the time you calculate it all out to the end of the year.
if you get paid every 2 weeks, you get money more often but you get less each time but it's negligible for most people.