How would you feel if someone could see into your current account? They would see your salary, any social welfare payments and all of your direct debits.
What subscriptions would they see? Would they be surprised at your coffee intake, the number of takeaways you get, or your online shopping habits? When it gets to this time of the month, would they be surprised by how little there is left? Someone with access to your current account could probably tell a lot about you.
Banks, of course, keep data on our spending. They have a unique view of the nation’s habits, and they’ve seen it all.
Their data can tell us a lot about how we manage our finances, and about human nature. Some banking apps can now tell us in advance when regular payments and bills are due to hit, and when our funds might be running too low to meet them. The data can prompt us to do some financial housekeeping, too, to keep things from tipping into the red.
On the Money: the personal finance newsletter from The Irish Times
‘My retirement plan is somewhat intertwined with the success of Killruddery Estate’
‘Have I any rights at all?’ Virgin leaves one customer without broadband and chases another for two cent
The average Irish Christmas will cost €1,177, a rise of 14%
End of the month
This week and up to the middle of next week, restaurants, service stations, supermarkets and entertainment venues can expect quieter days. As the State splutters towards pay-day, spending on groceries, eating out, entertainment and fuel slows down, according to Bank of Ireland current account data.
The bank’s daily data on spending patterns indicates, unsurprisingly, that discretionary spending broadly follows salary payments, with a “significant drop” seen across all spending categories in the week before pay-day.
If you’re scheduling a night out with friends or planning a fundraising event, avoiding this time of the month will probably make for a less lean time.
When it comes to recurring bills, Bank of Ireland’s Every Day Spending data indicates that the most common reason for a direct debit to fail is due to insufficient funds.
“An important part of managing the more everyday expenses is to review your finances regularly and take practical steps, like ensuring direct debits are coming out of your account when you know you will have the funds to cover them, directly after you have been paid for example,” says Dawn Bailey, Bank of Ireland’s head of financial wellbeing.
If you’ve got direct debits coming out at this time of the month, right before pay-day, you can reduce the risk of them bouncing by rescheduling them.
What’s happening with Ireland’s housing crisis and where do we go next?
Pay-day feeding frenzy
Towards the end of next week and early the week after, your current account probably resembles feeding time in the piranha tank.
Once your salary drops in, a multitude of direct debits descend on it, probably paring your funds to the bone. Rent, utilities, mortgage, mortgage protection, house insurance, car insurance, health insurance, memberships, subscriptions – everyone wants a piece of your pay cheque.
The majority of direct debits go out at the end of the month, when customers get paid, or when customers get social welfare benefits, according to Bank of Ireland data.
“In the case of larger, regular expenses like mortgage payments, usually customers plan for mortgage payments to be scheduled in line with their salary being paid into their bank account, so pay-day would be the norm,” says the bank. It can be helpful to switch all direct debits to this time of the month.
This will give you a realistic view of how much disposable income you really have and if there is a possibility of putting some aside as savings.
Use the insights
Did you know you had two Netflix subscriptions? Did you receive a refund for those jeans you returned? How much did you spend on groceries last month, and did you know it was 30 per cent more than you usually spend?
It can be hard to keep track of your spending and to spot anomalies in your current account. Some 70 per cent of adults need help with tracking their spending, according to Red C research, quoted by Bank of Ireland.
Many current account providers add value to their online offering by sharing personalised spending insights with customers. With Bank of Ireland’s Money Insights 365 money management service, insights appear automatically under the customer account information.
They include things like a heads-up when there is a spike on regular spending, low-balance warnings or spending that doesn’t match your normal behaviour. The app has more than 800,000 logins every day.
Check their fees, charges and customer service of course, but If you need help tracking your spending, choosing a current account that gives you analytics on your spending can really help. These include N26, Revolut and Bank of Ireland.
[ Online banking: do Irish banks really care?Opens in new window ]
Beware the bank holiday
If there’s a bank holiday in the month, your current account will likely take a battering.
We spend more on bank holidays, according to data from Revolut. If you are trying to keep a rein on spending, look ahead to bank holiday months. Where other big events also occur in a bank holiday month, batten down the hatches.
Take June. This presented a quadruple whammy on Irish current accounts. There was a bank holiday weekend at the beginning of the month, right after pay-day, and then there were the Taylor Swift concerts, GAA quarter finals and Dublin Pride all happening in the final weekend of the month, though helpfully, right after the next pay-day.
There were some 55.6 million Revolut card payments in June, up 15 per cent on June 2023, according to Revolut which has 2.8 million customers in Ireland..
“Customers in Ireland headed to bars, cafes, restaurants and nightclubs more often in June 2024, with spending rising by more than 10 per cent on these things compared to the previous month,” says Revolut. Spending on taxis and buses by Revolut users increased by more than 12 per cent in June, according to the company’s figures. There was a 34 per cent month on month rise in spending by its customers in cinemas, which it attributes to the release mid-month of Disney’s Inside Out 2.
There’s been a new public holiday on February 1st since 2023. Whether someone in power really wanted us to celebrate St Brigid, or simply get us to spend more in the economy at this quiet time of the year, we’ll never know.
When the sun’s out, we’re all in a better mood, and this can also increase our spending. May this year was the warmest on record, according to Met Éireann. The weather signalled that summer was on the way and that may have triggered us to spend more.
“The May sunshine sparked a significant increase in consumer spending in sports clubs, which jumped 22 per cent month on month,” according to Revolut.
Parents started spending more too, booking sports and recreation summer camps for children, according to the data. Sports apparel and sporting goods shops benefited too, with spending up by about 12 per cent month on month. Spending on gym memberships rose by 20 per cent on the month, perhaps as current account holders endeavoured to get beach-ready.
“With more than 2.8 million customers across Ireland, we are able to draw genuine consumer spending insights from a data pool that represents over half the country,” said general manager at Revolut Bank UAB, Ireland Maurice Murphy.
May’s fair weather also saw customers flock back to golf clubs, with spending rising 20 per cent month on month.
The week of the month, the weather, bank holidays, big events, or any whiff of festivity all impact our bank balances. These impacts are pretty predictable, according to bank data. And consumers can use those insights to manage their direct debits and their spending to keep their balance in the black.
You can contact us at OnTheMoney@irishtimes.com with personal finance questions you would like to see us address. If you missed last week’s newsletter, you can read it here
