Halifax offer backwards budgeting, of a sort
CERTAIN Halifax current account holders will soon be able to see how much money they have spare in their account, no matter when in the month they check.
"Balance extra" will show customers what they have in their accounts once any direct debits, standing orders and pending transactions have been taken into consideration.
It'll be made available for certain Reward and Ultimate Reward customers to try out when they log in to online banking in the next few weeks.
Your spare money
In true backwards budgeting, which we explain in more detail here, we arrange to have as many of our regular outgoings occur as soon after we've been paid as possible.
The idea is that by getting incomings and outgoings to be as close together as possible, we vastly reduce our risk of accidentally spending money that we need to pay for truly essential items.
Balance Extra makes use of the theory, if not the practice, of backwards budgeting - by telling us what we have left to spend once all our regular outgoings have been taken care of.
Say we're paid £1,500, and we know we need £1,200 of it for essential expenses during the course of the month. If the bulk of those expenses don't go out until later in the month, it can be all too easy to spend more than the £300 we actually have spare.
While it can't do the important bit - removing the money from the account for us until we actually need it - Balance Extra could help with the psychological aspect of living within our means, by making it much clearer what those means are.
Imagine that the day after we've been paid, we log on to check our account and see that we have £300 in total - because that £1,200 worth of expenses has been accounted for.
We'll also see the effect of any spending we do from that point on, as soon as is possible - so we don't end up spending any of the remaining money twice.
As Nick Williams of the Halifax puts it, being able to see "how much money you really have available to spend will help customers avoid financial strain later in the month".
Your actual balance
Balance Extra does have its limitations, however.
It'll only be available to people logging on to their account online - and perhaps for obvious reasons, people will be shown their actual balance first and foremost, rather than the more limited "spare cash" version:
Beyond that, there's the issue of eligibility. When it's introduced, it'll only be available to sole account holders with either a Rewards or Ultimate Rewards account.
The Halifax tell us they're going to take customer response into account before deciding whether to offer it with their other current accounts.
But joint account holders are still likely to miss out. Balance Extra calculates funds on a monthly basis, using the date of our pay day. As joint accounts could be expected to have two "pay days" per month, it'll affect the accuracy of the tool.
And while it can deal with "forecasted" payments, one-off transactions won't show up until they become "pending". That's fine when it's the weekly shop, but it could be more of an issue when it comes to bigger bills, such as an insurance renewal.
At least we'll have a better idea of how much money we've got spare when we need to make those kind of payments - but it's likely that there will still be times when leaving sticky note reminders for ourselves will be useful.