Long Pay Period Warning & Your Personal Finance Stress Test

This August end-of-month pay period is going to be long. Every time we have a long pay period, Facebook explodes with conversations on this subject, and they provide a fascinating look into how people handle their money.

Actual Military Paydays

Because every month is not 28 days long, and because banks don’t work on weekends and holidays, military pay doesn’t always come on the 1st and 15th of the month. Any time that the 1st or the 15th falls on a weekend or holiday, the actual military payday is pushed to the previous business day. If there is a weekend and a holiday together, the actual military payday can be up to three days earlier than the 1st or the 15th. Usually, these things sort of balance themselves out over the course of the year, with military paydays usually coming 14-17 days apart. But every once in a while, the calendar falls in a crazy sort of way and the paydays come a lot closer together or a lot further apart.

This August 2021 End-of-Month Pay Period

Because the 15th of August is on a Sunday, the actual regular payday will be on Friday, 13 August 2021. The next regular payday will be Wednesday, 1 September 2021. That’s 19 days between pay periods. 

If your bank or credit union credits your military pay early, you can move those dates one or two days earlier, but the result will still be the same.

What’s The Big Drama?

Situations like these tend to show who is struggling and who has a good handle on their financial situation. There are valid arguments on both sides, with some folks saying that there is no way that even good money managers can stretch a paycheck for three weeks, and with other folks saying that any issues are solely a problem with your spending. Neither side is 100% right or 100% wrong, but It can be useful to see how a long pay period impacts your finances, and use what you learn to make little improvements for the future. Click To Tweet.

From a long viewpoint, there shouldn’t be a financial problem with a long pay period. Regardless of how the paychecks fall in a year, the year is still 365 (or 366) days long and there are still 24 paychecks in those same number of days. You have the same number of rent payments, and car payments, and credit card payments whether your pay comes 10 days apart or 20 days apart. Either you have the financial capacity to make it through a 31 day month, or you don’t – when the paychecks come shouldn’t matter.

But when you drill down, there can be some individual difficulties. Let’s say your grocery budget only covers 17 days of groceries – how are you going to eat for those 3 extra days? Logically, it is easy to say that you should have some left over from the last time we had a shorter pay period. But when you’re pinching pennies, sometimes it doesn’t work out that way.

A long pay period is a great way to measure how you are doing with your finances. If you don’t even notice, you’re probably doing a good job. If it is a bother but not a big deal, you are probably doing OK but have room for improvement. If it is an emergency, you need to make some major changes.

What You Can Do For This August

If you are living paycheck-to-paycheck, start planning now to get through this August. Cut back your spending, and use the tips in 85 Ways To Get Through A Long Pay Period to ensure that you won’t be short on any essentials at the end of the month.

What You Can Do For The Future

If this month is going to be tight for you, get through the month and then start planning now to avoid problems during future long pay periods. Build up your emergency fund, build a spending plan around a 31 day month, pay off debt, and do all the other basic things that build a solid financial foundation. Meet with the financial educators available at your installation’s family readiness center. Take a class. Read a book. I promise you that your life will be so much easier!

More Long Pay Periods in 2021

Depending on how you get paid (early or regular,) this will not be your last long pay period this year. Plan ahead now so that your November don’t have any additional stress – goodness knows that life can be stressful enough without money troubles, especially during the holiday season.