How to survive the 6-week pay gap

How to survive the 6-week pay gap
Written by Mark Grimley
Published on 20th December 2017
Updated on 15th May 2020
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If you’ve borrowed to cover the cost of Christmas or haven’t had a chance to budget your money, it may seem like January lasts forever! You might not have known this, but there’s up to a 6 week gap between paydays in December and January, as companies ‘treat’ employees by paying them before Christmas. Money management in the new year can be a drag, so here are some easy ways to mind the gap.

Top ten tips for making your money last until payday

Christmas is fast-approaching, but you haven’t managed to stick to the budget this year (what budget?!). Maybe you’re always running out of money, but now you need some real help to avoid dipping into that expensive overdraft. Whatever the reason, we’ve put together the ten best life hacks that show you how to stretch your money further.

  • Set a weekly budget. It’s easier to keep spending in control if you think in weeks, not months. This will help you avoid running out at the end of the month.
  • Put a cheap RFID sleeve on your card. It protects you from skimming and forces you to stop briefly before spending - train yourself to think, ‘do I really need to buy this?’.
  • Leave your card at home on a night out. Set yourself a spending limit and only take that amount of cash with you. Make sure you have enough left for the trip home!
  • Make lunch, don’t buy it. £2/day = £10/week = £40/month. Save money by preparing your lunch at home - commit to a few days and see if you can get into the habit.
  • Sober up. Join the Dryathlon campaign and stop drinking in January. It’s a great excuse to save money and feel healthier, with no hangovers or drunken injuries!
  • Use up points and gift cards. Pay for shopping at Sainsbury’s with your Nectar points and spend all the cash on gift cards before using your own money!
  • Avoid the sales. What’s cheaper than saving money in the sales? Staying at home! This is a short term fix - in the long term, it’s often cheaper to buy presents in advance.
  • Eat before you shop. Eat at home and it’s cheaper than eating out. You’re also more likely to splurge on expensive food if you’re shopping while hungry!
  • Make a list. It’s easier to focus on what you need, not what you want when you have a shopping list.
  • Consolidate your debt. If you have high interest rate debt, compare 0% introductory rate balance transfer cards, which may make it easier to manage. Find out more in our guide and make a repayment plan before applying!

How can you make your money stretch further?

While some of the tips above could help you find savings and get a short term fix, you’ll need to start putting a plan in place to avoid getting into a sticky situation again.

This might not make a huge difference in January, but by the end of the Spring, you’ll be on the right track. Financial management has always seemed a bit tedious, but with the latest gamified budgeting apps, you’ll find that it’s actually quite enjoyable! It’s good to get in control of your money, as well as helping you to identify savings, making money last longer!

Yolt and Moneyhub are two financial apps which let you track your incomings and outgoings automatically, but only if your bank is supported. You can use them to see all your transactions, set a budget, categorise your spending and see how much you can afford to save. Barclays, FirstDirect and Starling Bank are all onboard, while Santander and Lloyds are not compatible at the moment. However, changes to regulation over the next year should make apps like this much easier to use.

The problem with budgeting apps is that they rely on lumbering old banks, which can take days to process transactions. This can make it very difficult to keep track of your spending. Newer app-based banks, like Monzo, Starling Bank and Loot are a better way to stay on budget, with each transaction showing up almost instantly. They also let you set a budget, categorise your spending and put money into separate ‘pots’ or ‘goals’. It’s easy to sign up - just go through the simple steps when you open the app for the first time. However, be wary that with these very new banking systems, you’re reliant on your phone and the app. It’s worth having a backup account or some cash on hand. Another alternative is a prepaid card, which you can load up with your monthly budget, to keep you from spending too much.

On a low income? How can you budget your money effectively?

If you’re really struggling to make ends meet, it’s worth looking into whether you’d be entitled to any government assistance, but first, put together a budget. Make a note of all your incomings and outgoings and try to weed out any unnecessary direct debits or subscriptions - you could even use one of the apps above. If you’re a smoker, you can get free advice and assistance to quit (here are stories on how others have quit ). If you spend a significant amount of your money on drinking or nights out, set yourself a monthly budget for socialising and stick to it.

Concerned about your financial situation, but don’t want to look for government support? Consider whether benefits could actually help you get through a rough patch. If this makes you uncomfortable, bear in mind that your National Insurance contributions will have already been helping out other people who’ve fallen on hard times. However, if you need to know how to make money last until payday, remember that you may not be eligible for benefits and even if you are, it can take weeks During this time, you could reach out to family or friends for a loan, but if this isn’t an option, the Choose Wisely Eligibility Checker you with a suitable lender.

Find Loans

Use the Choose Wisely Eligibility Checker to find a suitable lender in just a few minutes, without impacting your credit score.

Are you always running out of money?

If you need more managing money tips, it’s worth thinking on a bigger scale. January will be over before you know it and it’s possible you’ll still need to know how to budget money on low income. What can you do in the longer term that will help you repay debts and start to save again?

Cutting back on your phone contract is a great way to save in the long term. When your contract ends, cancel it and opt for a SIM only deal with £5 free credit from a company like giffgaff (which uses the O2 mobile network) or Plusnet. You can transfer your number and change your contract each month to suit your needs. You won’t be locked in to a contract and it’s cheaper than getting a new phone straight away. This could save you £500/year if you usually buy a high end phone.

Moving house might seem like an expensive option, but if you’re living on your own it could be worth the hassle, saving you £100s each month. Living with friends, a partner or in a house share will usually cost significantly less than having your own place. If you’ve got some flexibility, think about moving somewhere cheaper, whether that’s in your area, or nationally. The best option is a place where rent is cheap and the pay is good. In 2017, Lloyds released its report on the most affordable places to live in the UK. You’ll notice that none of the top ten are in the South of England!

Price to Earnings Ratio
Northern Ireland
Northern Ireland
Northern Ireland
Newcastle upon Tyne

Top five websites for making money last

Choose Wisely - You could have the convenience of a cashback card to save when you shop.

Extreme Couponing - Make the most of money off vouchers.

Gift Card Granny- Buy unwanted gift cards at a discounted rate.

Nectar - Earn points at eBay, Sainsbury’s and elsewhere, then spend them like money.

Quidco- Get cashback without a credit card by buying through a cashback website.

Mark Grimley
Written by
Mark Grimley
Head of Partnerships & Take Control Author at Choose Wisely

Mark joined Choose Wisely in 2015. He continues to work in close contact with the providers, brokers and journalists operating in the world of consumer credit.