We’ve already spent most of this month’s pay

It's official, the UK is terrible with money. A new study has revealed that we spend almost half of each month's disposable income within 24 hours of being paid - and four fifths of it within seven days.

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The study, by Portafina, found that we have an average of £560 each month that's not already allocated to bills and living costs. This would mean we have £18 a day to spend on ourselves. However, instead of spreading the cash evenly, we blow the lot immediately. By the last working week of the month we only have an average of £67 left to last us to the end of the week.

Worst 'payday millionaires'

Those aged between 18 and 24 were the most likely to live as 'payday millionaires' with a third spending 40% of their disposable pay within 24 hours, and 51% left with £50 to last the whole of the final week before payday.

The study also tracked down the cities that were home to the most payday millionaires (who spend at least half their disposable income within 24 hours of getting paid).

1. Belfast (27%)
2. Liverpool (20%)
3. Dublin (17%)
4. Birmingham (16%)
5. London (15%)
6. Manchester (15%)
7. Edinburgh (14%)
8. Newcastle (13%)
9. Bristol (12%)
10. Sheffield (12%)

When the study delved into what people were spending their money on, they found that we spend an average of £65 eating out, £52 on takeaways and £57 on drinking in pubs and bars. We also splurge £58 on new clothes, £57 on things for the house, £72 on travel, £44 on beauty and haircuts, and £47 on things like the cinema, theatre and gigs.

Should we be worried?

Jamie Smith-Thompson, managing director at Portafina, points out that on the plus side, the average person does make sure they have some disposable income left for the last week of the month - just not very much.

However, it shows how much we are living month-to-month, and holding our breath financially in the last few days before payday. It's one reason why bank glitches around payday have left people with absolutely nothing to live on - despite many of them being on good salaries.

These glitches have revealed how vulnerable we all are, and should serve as a reminder that a savings safety net should be part of everyone's monthly plans. When we're busy allocating money for bills and necessities - and deciding how much is left over to blow on cinema tickets and haircuts, we need to have a sum of cash we put aside in a savings account.

This needs to come out of our account on the first day of the month, before we have a chance to overspend. That way, even if we continue to live like payday millionaires, we won't be plunged into debt if we need to call a plumber in the last week of the month.