Why Payday Shouldn't Matter
Pitbull raps about it, *NSYNC sings about it: Payday is a good day.
And I agree. Seeing the fruits of our labor has been part of the human experience for centuries. What’s changed over the centuries, however, is the predictability of those fruits.
Today, most of us aren’t waiting for a seasonal harvest. We know the exact day we are getting paid and the exact amount.
Why then, do we act so surprised and spend so freely when that paycheck hits? Discretionary spending jumps over 30% in the 2-4 days following payday – across all income levels. Spontaneously treating yourself isn’t inherently a bad thing.
But.
A significant number of us are living paycheck to paycheck, savings rates are at near record lows, and young people are incredibly stressed about money – maybe the payday splurge isn't the best strategy?
Let's talk through a better approach.
By controlling payday spending, we can put our money towards things we’ll appreciate now and in the future, like:
- Larger savings accounts
- Full emergency funds
- Less time under the weight of student loans
- The list goes on
Payday shouldn’t dictate our spending, our goals should.
How do we go from splurging to smart spending?
A bit of budgeting and a LOT of automation.
How much do we splurge?
According to InMarket’s 2024 Payday Insights Study, spending spikes significantly the days after payday:
- Restaurants (26%)
- Electronics (47%)
- Home Décor (40%)
- Toys (40%)
- Bookstores (230%) ← the Goodreads crowd doesn’t play
- Cruises (55%)
