May 2009 - Most people spend their wages by the 20th of the month
New research by The Co-operative Bank Current Accounts has revealed that the 20th of the month, is the day by which most people have spent their wages.
The research shows that despite the current economic climate, many people appear to be burying their heads in the sand, by adopting a 'live for today' attitude and spending over half their wages on nights out and shopping trips within the first 11 days of being paid.
After setting aside money to pay bills most people are left with less than 10 per cent of their wage to survive on for the remainder of the month, often leaving them to depend on credit cards or overdrafts.
John Barker, Head of Current Accounts at The Co-operative Bank, said: “The research shows that many people are still looking to go out spending straight after being paid every month, but with the current economic downturn, it clearly leads to a much more difficult time later when many cannot get their wages to stretch until they are next paid.
“In the present economic climate developing a household budget is essential to keep spending in check and to identify ways costs can be trimmed. Keeping a much closer eye on their bank account will help people to know exactly what they have to spend”.
The study, based on the average take home monthly wage of £1,583 shows that most Brits spend at least £80.00 in the first 24 hours after being paid. This then rises to £228 within 48 hours, which equates to almost 15% of the average monthly take home salary and by the 11th day of the month the average person has spent half of their wages - or £792.
Rather worryingly, the findings also show that once money has been set aside for bills, the average worker has just 3 per cent of their wages - £48 - to live on for the remaining ten days.
The research also reveals that as well as not having a tight reign on their spending habits, two fifths of workers (40%) are completely in the dark about how much money they have, choosing never to check their bank balance when withdrawing cash.
And one in 10 people never open bank statements, preferring to throw the statement in the bin without even tearing open the envelope.
The findings also show that when people begin to run out of money, they then choose to reign in their spending by cutting back on the finer things in life.
Three fifths (62%) of people stop eating out, whilst over a third of people (36%) switch their food shopping to the budget supermarkets.
Other ways people look at cutting costs include halting their social life and stopping going out (55%), choosing to eat at their parents or the in-law's (14%), living on tinned food instead of buying fresh (18%), and getting lifts to work with colleagues (9%).
The Co-operative Bank current accounts provides the following top five tips to ensure you can make your money go further in the current economic climate
- Reduce any debts as a priority
- Make a monthly budget and stick to it
- Regularly check your bank account to ensure you are up to date with your finances
- If you can afford it, look to put some money aside to cover emergencies
- Look to make savings wherever possible – for example take a packed lunch to work and shop around for the cheapest utility providers
Notes to editors:
Research carried out by onepoll.com in March 2009 on behalf of The Co-operative Bank amongst a representative sample of 3,500 adults.
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