If you wait eagerly for payday to run out and spend some money, you’re not alone. “With our research indicating that the vast majority of the country are treating themselves on payday, it seems that most people need a bit of a pick-me-up treat at the end of the month”, according to Richard Lynch, Managing Director of alternative banking solution Suits Me.
In fact, their research shows that Brits spend 21% of their disposable income on the day their salary is paid into their bank accounts – and they’re mostly spending on treats, including shopping and eating out.
What payday purchases cost Brits
According to Suits Me, Brits are spending an average of £132 of their monthly wage on payday treats. Londoners are splurging the most, spending £163, while people in the South West are limiting their spending to about £99.
Most Brits are spending on takeaway (41%), with drinks out and meals out following close behind. Almost 30% treat themselves to designer clothes or shoes on payday as well.
Then there are the more random payday splurges. For example, the survey revealed buys such as a Vatican City Stamp for £500, a goose costume for £200, and a boat for £750. Not all expenses are that large, though. People also spent £36 for a dog paddling pool and £70 for a pillow with a duck on it…
Of the over 1,000 people surveyed, only 12.5% did not splurge on payday.
Making different choices on payday
While there’s nothing wrong with treating yourself on payday, if you’re overspending on things you don’t need, it might be time to make some changes. Research shows that people who put money aside on payday end up saving 114% more on average. This connects to the old “pay yourself first” belief. If you wait till the end of the month to save something, chances are you will have a lot less to set aside.
In addition, you want to make sure you’re not overspending early in the month and then having to charge things to your credit. “Whether it’s a cheeky takeaway, drinks with friends, or even something more extravagant such as a boat, it’s important that the public are mindful of spending too rashly at the start of each month to ensure you are not left short before your next salary payment comes through”, says Lynch.
To make sure your money is working for you, consider opening an ISA or starting a small investment account. If you don’t have enough knowledge of the market to do it on your own, a financial advisor can help you get started.
Then look at how much you’ve been spending on payday every month and save half of that as soon as you get paid. You don’t have to stop treating yourself completely. In fact, that can actually backfire and cause you to splurge on a bigger item later on.
Instead, commit yourself to spend a smaller amount on payday and save the rest. Even better, decide in advance how much money you’ll put in the splurge category. Whether it’s £50 or £200, it should make sense based on your other expenses and how much you’re saving.
