During our Adult Gap Year, can elect to be paid in one of three ways:
- In one lump sum
- In two lump sums, six months apart
- Fortnightly, as our pay usually comes in
One lump sum, would allow us to pay off our mortgage – and then we’d have nothing to eat. Lol. We could control the funds and earn the interest. The reality is interest rates are so low, we’d earn nothing. So that makes it pointless. It won’t affect our tax, as we’ve already paid tax on the income.
We don’t need a big sum to pay for our planned travels, except the campervan but we have that covered in other ways.
The real question is: as fortnightly wage earners all our lives, are we ready to self manage? I know we wouldn’t go overboard. We are not going to blow the amount on some luxury. In fact we don’t see this as a windfall – it’s our year’s pay.
Two lump sums: half the amount is attractive. We could pay some big bills with the campervan with the first lump sum and know there’s more coming in six months.
Fortnightly pay: this will make it more like our regular pay and budgeting approach. I use the term budgeting loosely – we live within our means but don’t really track or budget, except to save for big things we want or need.
Our regular bills are monthly (mortgage and insurance), quarterly (water rates and utilities), yearly (land rates and car registration) or weekly (food). With or without travel, these things will remain largely unchanged.
Regular pay helps with our cash flow budgeting.
So which would you choose to be paid?