The last week of the Month – the days of Bankruptcy

I am writing this post probably in the last week of the month. Sometimes, I wonder why do months have 30/31 days. Why can’t we have a month of only 3 weeks? The reason for my logical questioning is directly related to money. Though I am not an economist, I think the following formula is applicable to all salaried class people:

Formula 1 – The earning of a household every month = Spending of 3 weeks

Formula 2 – The salary of a person < Spending of 4 weeks

Now let me explain both the formula:

Formula 1 states that any income in a household is sufficient to last for only 3 weeks.

Formula 2 states that whatever be your salary, it can never last for the entire 4 weeks of a month.

The 1^st of every month starts with a sweet little message from your bank saying “Salary Credited”. The moment the money lands up in your account, the law of diminishing returns comes into force. The spending pattern in every household is the same:

1.Week of Commitments

The first week of every month is the week of commitments. The money which lands up in your bank is withdrawn from the ATM for further distribution so as to keep the economy of the country ticking. Salaries to the Maid, Doodh wala bhai, Newspaper wala bhai, EMI of car, EMI of a house (whose possession is only in dreams), Tuition fees, etc. Rent of the house, Electricity and Water bill and so on.This rotational flow of money amongst various people is your contribution to the nation apart from the income tax.

2.Week of Indulgence

Once you are through with your commitments and the moral load is off your shoulders, you are ready to live for yourself. You start eyeing the beautiful Da-Milano handbag which you have been postponing for the last 3 months or the wardrobe which you were planning to buy on the e-commerce site. Family dinner at an expensive restaurant or throwing a party at home is generally planned or executed in this week.

3.Practicing Austerity

This week is controlled by the “Law of one missing Zero”. As per this law, the money in your bank shrinks by one zero by the time you reach the 3^rd week of a month. So, if you had Rs 100,000 in your account in the first week, you will have only Rs 10,000 in your account by the third week. This is also the week when you realise that you are becoming a victim of dementia. You forgot to pay the car insurance premium or your personal insurance premium.This unplanned expenditure makes your savings go topsy-turvy. It is an expense which you can’t postpone and have to incur immediately.

4.Bankruptcy days

This week is the most dreadful of all. It’s a week when the savings in your bank actually tend to become lesser than what you had in the last month. It means this month you have spent more than you have earned. It is also called the week of postponement. Most of the expenses which are due in this week are carry forward to the 1^st week of next month. So, if your car service is due this month or you have to call the Sofa repairman, you tend to delay it for the next month. This week is also the week of borrowing where you tend to make short term borrowings from your spouse or somebody who has a healthier financial book in the family.

Some last-minute expense heads which make your budget go haywire. Most of these unplanned expenses strike in the 3^rd / 4^th week.

1. Gifts for a relative or a friend’s wedding which you had not planned.
2. Your AC breaks down in the peak summer.
3. The faucet in your bathroom starts leaking.
4. You have to go out of the city for a sudden personal work and last-minute air tickets are expensive.
5. Your NRI relative has got a new i-phone for your daughter which you had asked for and now you need to pay him.
6. Your car fails to start one fine morning and needs a new battery.
7. An item in an ongoing sale that you desperately wanted and can’t postpone as the sale will not last.
8. Your maid wants a loan from you.
9. Your kid has to register for a competitive exam and needs to pay a fee.
10. A family member is having a health issue that is not covered under Mediclaim.

You will enjoy reading more such stories on my blog. Click on the link:

Salary and Expenses:Two sides of the same coin

A Weekend Break