How to convert fortnightly income to monthly income for budgeting?

meumax on 07/09/2017 - 13:53

I am using a great tool called Pocketbook to manage my finances. Recently however I think I have found a bug in the way it calculate monthly income (for the purposes of monthly budgeting) from my fortnightly pay.

My expectation is ($3,409.23 x 26)/12 = $7,386.665 monthly income. But Pocketbook says my monthly income is only $7,305.49.

I have tried every formula I can think of to get that figure including

  1. Assuming they equate 1 month to equal 2 fortnights
  2. dividing my salary by 14 to get a daily rate then multiplying by the average number of days in a month 365/12

This is driving me crazy because the bug extends to the way it converts non monthly expenses to monthly expenses as well. I need an accurate figure because I want to determine precisely what is the maximum I can afford to safely pay in loan repayments monthly to work out how much I should borrow to buy a house.

Is there another formula to convert fortnightly figures to monthly figures that I am not aware of?

Financial

Comments

  • geek001 on 07/09/2017 - 14:03
    +1

    1. I think the bank uses their own method of calculating how much they should lend you.

    2. Perhaps it is not such a great idea to borrow to a point where $80/month matters.

    • meumax on 07/09/2017 - 14:06

      Lol, $80 wouldn't matter. I've got two other sources of monthly income, my wifes salary and rental income from investment property.

      I'm just using my fortnightly salary to demonstrate the bug in Pocketbook. It adds up my wifes and rental income correctly because they are actually paid monthly but not my fortnightly income.

      It also exhibits the same bug when adding up expenses that are not monthly i.e. utilities which are generally quarterly and things like phone and Internet which are usually monthly.

  • whooah1979 on 07/09/2017 - 14:10

    365

    Shouldn't you use business days or are you working on weekends too?

  • outlander on 07/09/2017 - 14:10
    +9

    3,409.23/14
    *30
    =7305.49

    • meumax on 07/09/2017 - 14:12
      +2

      OMG thank you SO much.

      I can't believe they assume a month equals 30 days when the correct way to calculate it should be to convert to daily rate, multiply by 365 then divide by 12.

      • outlander on 07/09/2017 - 14:14
        +14

        no problem. Sometimes you need to have the perspective of someone who really doesn't give a shit to find the solution

        • meumax on 07/09/2017 - 14:26
          +3

          Ozbargain is the best. I've had an outstanding support ticket with Pocketbook for over a week and they can't give me a straight answer. Neither did messaging them on their Facebook page provide answers but within minutes of posting here I have an answer.

        • Scrooge McDuck on 07/09/2017 - 15:06

          @meumax:

          People are idiots. Welcome to Earth!

    • bob smith on 07/09/2017 - 14:12

      ahhh, they assume every month is 30 days.

  • bob smith on 07/09/2017 - 14:11

    your logic sounds right.

    To get to $7,305.49 based on your fortnight income, the formula worked if you took 5 days out of the 365. No idea why though.

    I would understand if it the app calculated the monthly income higher, where possibly they used 52.14 weeks (365/7).

  • tomsco on 07/09/2017 - 14:13

    Having previously done payroll, fortnightly payroll is frustrating to me, especially come end of year when an employees PAYG summary doesn't match up to their annual salary as per their letter of offer.

    Then as an individual trying to setup a budget where some months you receive 3 pays and some months 2. PITA.

    Sorry to piggyback off your post, but I've been looking for an app and I've discovered this links with my Coles MC (yippee!), this is a huge thing for me. But I have to ask, do you know if it's possible to split transactions? For example, if the missus goes to the chemist, it may be 50% medicine, 50% toiletries.

    • meumax on 07/09/2017 - 14:21
      +1

      Sorry, Pocketbook doesn't allow splitting an individual transaction across multiple categories.

      But even then, I find it still far and away the best personal financial management tool available to get a holistic view of household income/expenditure.

      • tomsco on 07/09/2017 - 14:23

        Haha, no need to apologise. Thanks for the answer.

        Yep, just having a bit of a play through and it does seem really good. As I said, Coles MC (28 Degrees even) where you can't even export a transaction list, this is a god send.

  • chumlee on 07/09/2017 - 14:36

    Pocket book is owned by zip money. They just trying to bait you into taking out a loan with them. You must resist!!

    • meumax on 07/09/2017 - 15:15

      That must be related to the button at the bottom of the app which reads "Optimise your home loan". If you press it, it prompts you to send an enquiry to 1300Homeloan who I assume is a broker.

      I've got my own broker so I never tried them out and other than that there isn't any other advertising of mortgage related services in the app that I've seen.

      • chumlee on 07/09/2017 - 15:22

        Zip money does interest free finance with retail stores. They want to build a marketing database and then cross sell

        • meumax on 07/09/2017 - 16:15

          Oh ok. I've never seen anything in the app relating to personal loan ads or interest free finance of purchases.

          Maybe it's because I don't have any CC debt. I don't know.

  • tebbybabes on 07/09/2017 - 18:02

    I tried pocketbook too. This was around the time ANZ money manager was deprecated.
    I can't quite recall why I stopped using it, but eventually I settled for MoneyBrilliant. So far, it's been working alright. I have the same gripe about not being able to enter split transactions though.

    • meumax on 08/09/2017 - 09:54
      +1

      I really liked MoneyBrilliant too because it also tracks my share/property/super portfolio and uses all of that plus your bank balances to tell you your net wealth.

      Unfortunately you have to pay for those advanced features. It turns out you get to use all the features for free for one month before you have to start paying and then you're back to the basic plan.

      I didn't want to pay and since I felt that Pocketbooks handling of transactions was a bit better and it has a better iPhone app I decided to stick with it.

  • mskeggs on 08/09/2017 - 14:00
    +2

    When I was paid fortnightly I just budgeted two pays per month and treated the two 'extra' as happy bonuses when they came along. That way you get a merry month twice a year.

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