I wonder if a person's pay frequency contributes to their ability to save money.
For example, is it easier for a person to save money if they are paid weekly or is it easier if they are paid monthly? What about bi-weekly? What about twice/month? What about daily?
My hypothesis is that those paid MONTHLY have a better chance of saving money. This is not backed up scientifically, but here are my reasons to support my guess.
- Most bills are monthly – mortgage, utilities, car payments, student loan payments, insurance payments, etc.
- When a person is paid monthly, they automatically know that there will be no more money for 30 days. This fact forces the average person to go into "saver-mode". They do not want to be eating bread crumbs for the last week of the month!
- The majority of investment plans suggest a monthly contribution – $25/month minimum; $100/month minimum; etc.
- Development of a spending plan (budget) is easier when paid monthly. There is no need to develop a budget for multiple paychecks during a month that are attempting to pay individual monthly bills.
I would LOVE to conduct research on this!