Research released today by Thinkmoney reveals that 11.1% of overdraft users slip into the red on the 1st of the month, with half overdrawn by the 16th.
17 million UK consumers with a current account go into an overdraft at some point during the month, with the rush to spend wages on payday meaning that some go overdrawn as early as the 1st.
The research demonstrates how people’s spending behaviour changes throughout the month. Straight after payday, 32% go on a big grocery shop and 16% fill up the car with fuel. People also like to treat themselves, with 12% spending money on new clothes and 9% going on a “big night out”.
Ian Williams, Director of Communications at thinkmoney, said:
“It seems that the excitement of being paid can cause people to dash out and spend, only to run low on funds later in the month.”
The data seems to reflect this idea and the research found that half of overdraft users are in the red by the 16th. During the second half of the month, 42% of people said that they put off any non-essential spending, and 26% said they live off the food they already have in the fridge and cupboards. 24% of people avoid going out during this period, and 16% try to stretch the remaining fuel in their tank.
With more and more people resorting to payday loans to see them through the month, improved money management skills could help Brits to make their wages last longer. Williams went on to say:
“A good budget could help many people make it through the month without running out of money or borrowing from their overdraft”.