Thursday, June 12, 2008

Once Or Twice, Its Not A Useless Matter

The Government’s decision to pay the salaries of civil servants in two instalments has received mixed reaction from Cuepacs and the MTUC.

Cuepacs president Omar Osman said they understood the rationale behind the move, saying that it would help lower income staff manage their expenses.“Now that they get their pay every two weeks, they can estimate their expenses better,” he said. However, Omar said civil servants in the higher income bracket might not like the move as it would curtail their financial freedom.

He added that Cuepacs would hold a meeting on July 5 to discuss issues related to the fuel price hike before embarking on a nationwide tour to explain the issue to its members and advise them to manage their finances better.

MTUC deputy president Mohd Khalid Atan said it was more important to look at how people spend their money. “It doesn’t matter if they receive their pay once or twice a month. It is how they spend it that matters,” he said. He said many might encounter difficulties paying their bills and loan instalments at the end of the month with the Government’s move.

“Unless they save money in the middle of the month, the amount they get at the end of the month won’t be enough to pay their large bills. “It is easier to budget when you receive a lump sum,” he said.

Omar Osman said civil servants in the higher income bracket might not like the move as it would curtail their financial freedom - is that guy off his rockers? How to curtail freedom with being paid twice instead of once??? Omar, effectively you get to earn 15 days more on deposit rates with half of your monthly salary. Why are there so many idiots running around?

Not many places on earth pay monthly anymore. Many have switched to once every two week. Some are even weekly. Contrary to popular belief, its harder to budget with a lump sum - just see how many retirees with the one lump sum and how they fritter it away within 3-5 years. We all need help. The ones who can manage a good budget are few and far in between.

How many of us tend to literally starve in the second half of each month - be honest. I give you another example, say you get paid your annual salary once a year in advance on 1st January, and you make all your annual car, housing, maid, school fees for kids payments. I still am willing to bet that you will finish the money before April. Why? Because the majority suck at financial prudence and planning.

Will there be more admin work? Why, use direct banking services. If you get paid every 2 weeks, have them direct ly bank into your mortgage payments and car payments or rent payments (50% of course), where is the trouble? You tell me your landlord won't accept that?

I can vouch that when I was working in Sydney, the weekly wages was wonderful and I was much better in budgeting with no periods where I would be scratching my head where the money all went to.
Sure more admin work, but its a small price to pay for better budgeting. Private sector should follow suit. Really. It seems like a small thing, but it helps enormously from my experience and from countries which have been practicing these kind of more frequent payments.

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