How would you react if someone had the ability to observe your current account? They would gain insight into your income, any state-benefits you might be receiving, as well as all your standing orders.
What repeated costs would be unveiled? Would it be unexpected to them at the amount of coffee we consume, the frequency of ordering takeaway, or even the extent of your online buying habits? As the month draws to a close, would the reduced funds in your account take them by surprise? An individual who can look at your current account could probably decipher a considerable amount about your lifestyle.
Banks are, naturally, in possession of data on our expenditures. This gives them a distinctive overall picture of the consumer behaviour of the nation, and nothing phases them.
The information they hold can provide a significant understanding of how we handle our money and reveal certain aspects of human behaviour. Similar to a psychic, certain banking apps are now developed enough to predetermine when regular expenditures and bills are due, and even when our funds might be inadequate to fulfil them. The data can also serve as a nudge for us to tidy up our current accounts, ensuring we do not plummet into debt.
As we get to the end of the month, Bank of Ireland’s current account data suggests that this is the time when consumer spending on grocery shopping, dining out, entertainment and petrol slows down. The frequency of visits to restaurants, service stations, supermarkets and entertainment places also see a dip. This is attributed to the fact that the bank’s daily data on spending habits demonstrates a strong correlation between discretionary spending and income payments, with all spending categories seeing a fall in the week preceding payday.
Hence, if you’re planning a social gathering or fundraising event, it might be beneficial to steer away from this part of the month to avoid potential financial constraints.
The Every Day Spending data from Bank of Ireland suggests that the most frequent reason for a standing order to fail is a lack of sufficient funds in the account.
Dawn Bailey, the lead of financial wellbeing at Bank of Ireland, emphasises that routine evaluation of your finances and effective measures, such as confirming your direct debits occur when there are sufficient funds in your account, play significant roles in handling everyday expenditures.
She suggests that, to minimise the chance of returned direct debits, adjusting their schedule to align with your payday eliminates the issues that may occur when they are due just before your wage comes in.
The situation of Ireland’s housing crisis is under scrutiny. In the days following your salary deposit, your account will likely feel the pressure of several direct debits being deducted, leaving your funds sparse. There is a multitude of recurring expenses needing payment, from rent, utilities, insurances, memberships and subscriptions, which all take a chunk from your earnings.
By scheduling the majority of direct debits to go out at the end of the month, specifically after payday, you get a realistic understanding of your disposable income. This plan also aligns with when customers receive their wages or social welfare benefits, as found in Bank of Ireland’s data.
Significant recurring costs, such as mortgage payments, are typically arranged in line with your payday, the bank notes. Being aware of your actual disposable income after these deductions may enable you to consider saving where possible.
Keeping tabs on expenditure can be challenging. According to a quote by Red C, 70% of adults require assistance in tracking their spending. To help, many banks like Bank of Ireland now offer online services that deliver personalised spending overviews to their clients, making it easy to spot unusual activities in their current account. One such service is Bank of Ireland’s Money Insights 365, where automatic insights are provided under the customer’s account information.
Alerts of excessive regular spending, underwhelming balance notifications, or unusual spending habits are features included in the app. The platform sees over 800,000 sign-ins daily.
One should certainly assess their charges, associated costs, and quality of customer service when selecting a banking option. However, if you require assistance in monitoring your expenses, electing a banking account that provide expenditure analysis, like N26, Revolut and Bank of Ireland, can be immensely beneficial.
A word of caution for bank holidays – our spending seems to bob up during these breaks; data from Revolut reaffirms this. If you’re aiming to manage your expenditure, one needs to keep an eye on calendar months with bank holidays, especially those coinciding with momentous events.
Take, for example, the month of June, which posed quite the challenge on Irish bank account holders. With a bank holiday immediately after payday at the month’s inception, followed by Taylor Swift’s concerts, GAA quarter finals, and Dublin Pride during the month’s end – conveniently right after the subsequent payday.
In June itself, Revolut recorded approximately 55.6 million card transactions, a rise of 15% compared to June 2023. With nearly 2.8 million Irish customers, Revolut noted a significant surge in spending.
“The Irish clientele frequented bars, cafes, restaurants, and clubs more regularly in June 2024, leading to a 10% increase in spending in these areas compared to the previous month,” reports Revolut. Furthermore, its users showed a 12% rise in taxi and bus spending, while a whopping 34% increase in cinema spending, primarily owing to the mid-month release of Disney’s Inside Out 2.
There’s been an additional public holiday on February 1st since 2023 – whether this is to honor St Brigid or to stimulate economic spending during this quieter period, that’s something we’ll never find out.
Sunny weather often improves our mood, leading to increased expenditure. This May marked the highest recorded temperature, as reported by Met Éireann, signalling the onset of summer and hence an escalation in spending.
According to Revolut, the sunshine in May led to a substantial surge in consumer expenditure in sports clubs, witnessing a 22% month on month rise. Parents followed suit by reserving spots at summer sports and leisure camps for their children. Sports clothing retailers and sports goods sellers also experienced a surge in business, as spending on these areas rose by nearly 12% month on month. Additionally, there was a 20% increase in gym subscriptions on a monthly basis, potentially driven by customers eager to achieve a summer-ready body.
“With more than 2.8 million clients across Ireland, we are able to collect authentic spending data from a sample that represents over half of the nation,” stated Maurice Murphy, the general manager at Revolut Bank UAB, Ireland.
In May, the pleasant climate led to customers returning to golf clubs, resulting in a 20% monthly increase in spending on golf courses.
Factors like the week of the month, weather conditions, public holidays, major events, or any hint of celebration significantly affect our finances. These effects are largely foreseeable based on bank data. Consumers can utilise these insights to better manage their standing orders and expenses to maintain a positive bank balance.