To save, or not to save: that is the question.

It has been a long time since I last posted. I had a piece nearly ready to go and then Austria’s political crisis and resignation of the Generation Y Chancellor, Sebastian Kurz, rendered it all out of date without a significant rewrite. And I will concede that the last couple of months have been a struggle in terms of sitting down to write a blog. But I am back.

Yesterday saw me visit my bank branch for the first time in 18 months: there hadn’t been any need to do so, and even yesterday’s visit would not have been classed as being an essential one. I did however come close to going into a bank with my neighbour, who wanted to give the first lockdown the finger, in April 2020 by collecting her pension in person until I managed to dissuade her. All my payments have long been made electronically or by card and so I have no real need to go into the bank.

Every year, 31st October is World Savings Day (Weltspartag), although when it falls on a non-week day it seems to be the nearest working day. With 1st November being a public holiday in Austria (a day when I perform my duties as Chief Grief Officer and have a powwow with my wife’s family) this automatically usually becomes the 29th or 30th October. But is it really about saving (and by extension the accumulation of wealth)? Possibly in the eyes of the banks it is, since they can use your savings to earn their money (if they aren’t making money out of people paying-in their loose change and charging a healthy commission for the privilege of a coin machine doing their work for them).

Does everyone go around wearing their underpants over their clothes and a cape?

Curmudgeon the Elder, late 1990s

When I first mentioned about World Savings Day in the late 1990s to my father, his retort was “Does everyone go around wearing their underpants over their clothes and a cape?” I am sure that were he still alive and still reading his newspaper in his armchair he would look up and remark, “So that is why we have this COP26 event!” before chuntering away about some parts of the world not necessarily worth saving. In an era where you are lucky to received savings interest on your money any more, as has been the case now since the Great Financial Crisis of the late noughties, it is no surprise that possibly Weltspartag has a far lesser significance for Austrians than it used to.

Possibly though, it is not just the low interest rates that have eroded people’s interest in it though. Austria is still relatively secretive about banking – and the notion of banking secrecy “Bankgeheimnis” still exists to a certain extent. Prior to my arrival in the 1990s, I remember reading of anonymous savings accounts, where there was just a number of the account and a password that you told the teller in the bank if you wanted to withdraw some money from one. However, all that was consigned to history at the turn of the millennium, when it became necessary to identify oneself to withdraw money.

The elderly generation in Austria still have a fondness for savings accounts – still lovingly referred to as Sparbücher, even if they have long since been digitalised. I remember trying to get inside the mentality when I arrived as I went to the bank and queued behind woolly old ladies and suited gentlemen, who would doff their hats as they went to have their savings books updated, to check that their balance was still safely held by the bank, and who would then withdraw a stack of banknotes to go about their life for the next month. I remember a certain light-headedness when I held a 5,000 Schilling note in my hand for the first time.

But Austria’s savings mentality also rubbed off on me. I was a ruthless budgeter and saver. My first Austrian friends introduced me to acceptable practice of having my Sparschwein or Spartopf. Loose change for a while went into a Maß glass and was duly counted and cashed in every so often. 10 Groschen coins were objects of particular scorn, and they seemed to accumulate, given Austria’s tendency to round prices down by 10 Groschen (in a similar way to the practice of rounding down by a penny to 99p in decimalised Britain). The next lesson in Alpenrepublik thrift was in accumulating savings (in varying term accounts) and also having filled a reserve called the Notgroschen (literally translated as something like an “emergency penny”). It was a lesson that I took on board, and gradually filled with the rule of thumb “three net salaries”. The concept is clear – imagine you lose your job and therefore your income – and then your Notgroschen tides you over until you are hopefully already back in employment, and then you replenish it. It’s a psychological approach to getting you to live within your means.

But let’s return to the present. My sister-in-law’s son has put “nephewgate” behind him, having only broken the cycle of debt he had inflicted on himself due to a savings account coming up trumps a couple of years back. His new found frugality has allowed him to build up his Notgroschen, which has kept him and his girlfriend afloat amidst the choppy waters of the corona pandemic that seems set to roll on well into 2022 and beyond. We agreed yesterday in an act of solidarity to head off to the bank and to cash in the money we had in our respective Spartöpfe. For me it was from over the last eighteen months, although the weight of the coins felt a lot less than in the past, when I would go in once or twice a year with a heavy Sackerl filled with change. There was always a certain frisson of excitement watching the display on the change sorting machine steadily increasing and an inner “whoop” as it broke through the 50 euro and then the 100 euro barrier, and headed onwards and upwards.

Yesterday, however, the mood was less joyous. The sum was quite a paltry one, but that was a reflection on how much less I have been using cash in the corona era. The baker prefers contactless payment now, which was always somewhere I would get quite a lot of change from. As the machine stopped short of that three-figure threshold, it felt like a slight failure on my part. After all, only four years ago, I had managed to turn in some Schilling and walk out with about 125 euro. Nephew looked quite stoked that he had managed somehow to hit the dizzy heights of three figures.

The bank was far from packed, and the Weltspartag seemed to be a far more modest affair than I had remembered from the past. My mood was also dampened further when two rolls and a couple of cups of coffee from a baker that we went and enjoyed in the park came out at over 14 euro. I made the fatal mistake of blurting out to nephew that it was over 200 Schilling! Of course, he was indifferent to the remark as someone who could barely remember the Schilling as a card carrying member on the cusp between Generation Y and Generation Z, but did point out that we are heading towards 20 years of the euro.

So have my financially frugal habits become an anachronism in modern day Austria? I realise that Covid-19 has caused the divide to grow bigger between the haves and the have nots. It has been a wretched time for so many, especially those who are in the gig economy and the arts. The Kurier reported on Thursday that around one-sixth of Austrian are regularly overdrawn. More worrying, it is not a case of “a little bit of month left at the end of the money”, but on average people they are overdrawn by around 1,500 euro, which is the average net monthly salary for a woman in Austria (and yes there is still a gender pay gap here). Interest on overdrafts is usually from between about 5% and 14%, whereas savings interest is near negligible. This is how the banks earn their money from you.

There used to be the saying that if you owe a bank even so much as a single penny, they own you. (Some bright spark duly quipped that of course if you overdraw your account by the GDP of a small banana republic then you own the bank!) Online banking has put an end to queueing at the bank during their restrictive opening hours (I am thinking back to the 1990s, when I used to have to regularly get foreign currency from the bank, back in the unenlightened days before I could walk up to an ATM are withdraw cash with abandon), but the customer is the last to be rewarded financially for their part in it. Of course, you do avoid the costs of a manual payment – and this has seen a definite decline in the amount of begging Zahlscheine that you receive, or bills from tradesmen with a Zahlschein in the envelope. But the incentive to save is not duly apparent – as your money earns you almost as little if you have a high five figure balance, as if when you are only in the black by a few millimetres, before the charges and fees spiral dramatically as soon as a minus sign announces its presence.

However, there are some areas in which Austria gets it right, and does a far better job than the UK. There isn’t the misery created and perpetuated by minimum repayment on credit cards, as you by default pay them off in full. And also there are not the payday lenders charging obscene amounts of interest to those in the most financial misery, a practice that seems to be widely restricted to the Anglo-Saxon world. The UK has spent a decade in austerity, and it seems that those in the most precarious situations are those that are still squeezed ever harder with every budget, and pensioners really struggling with increasing energy bills, while the government’s chums line their pockets.

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