Sunday, January 27, 2008

End of the month account settlement

Each month, around the 25th, the banking cycle comes to a frenzied and unpredictable end.

Through the days credit card charges accumulate, wages are earned, utilities are consumed.  Unlike the US, all of this is invisible.  Credit cards cannot be accessed DSC03760 online, wages are paid once a month sometime in the last week, utilities fluctuate according to the weather.

During the last week of the month, they all collide in a maelstrom of debits and credits in my banks' cash account.

In the US, home of the hedge, I get a bill for each service, and  decide how much to pay or carry on each charge.  This allows for dynamic management of cash flow and interest month to month ("stress" for most Americans).

In the Netherlands, a cash economy, everything is suddenly extracted in full.

I've learned to transfer a few extra hundred euros into the account around the 22nd, and then to cross my fingers.  The dust usually settles by the 29th and I can transfer any excess back into the linked savings account, where it earns equally unpredictable interest (something over 2%, paid quarterly, on the minimum monthly balance above a threshold).

It would be nice to at least get airline miles for charges as compensation for all the excitement...


TextualHealing said...

Try doing it when you're self employed and can't count on the invoices being paid on a fixed date. The juggling gets immense. I think there is an expression for it "Borrowing from Peter to pay Paul""

Dave Hampton said...

Great observation: I also run a small business in England and juggling invoice payments is a constant pain. Like you, I'm begging for payment with one call, for time with the next.

TextualHealing said...

England is much worse than here for late payments- it seems to be a matter of policy for some companies / institutions. When I did occasionally do freelance work in the UK my customers invariably took ages to pay. Here they are usually quite prompt - though glitches occur occasionally and it can be painful if that is the bulk of your planned income for the month.