Five Tips to Improve Your Spending Habits
Retailers are aware that psychological cues urge us to spend more money. They implement them online, in their store layouts, through advertising and marketing campaigns. Multi-buy offers or temporary sales such as Black Friday can pressure us into impulse buys. It can be hard to refuse these offers, even in straitened times.
If you’re planning to save money for a rainy day or wish to put your money to better use, you might find that spending gets in the way of reaching saving milestones.
However, shoppers can become shrewder with their spending if they adopt some simple strategies.
Prioritise Saving Over Buying
Opening a savings account or an ISA is a good way to ensure you are putting your money aside, so you don’t risk spending it. Direct debits are also simple and easy to set up with your bank and guarantee your bills will be paid at the right time. This way you can adjust your spending habits by having a clearer budget for your spending each month.
Take Cash Rather Than Your Card
Studies have shown that swapping your debit and credit cards for cash when you go out can be very beneficial. Paying in plastic reduces the ‘pain’ of paying, because it feels less like ‘real’, physical money. Contactless payments have made it even easier to spend. Brain scans have found that the ‘pleasure’ zones of the brain are associated with purchases made on plastic, but both ‘pleasure’ and ‘pain’ flag up when paying in cash.
Don't Shop Until You Drop
Shopping when you are fatigued reduces your ability to focus properly and can often result in illogical decision making. You should avoid long shopping trips or spending hours browsing online whilst you are tired, as you will undermine your willpower when trying to make sensible purchasing decisions.
Ask yourself: do you really need this item? There are some simple steps when shopping online to help you delay your purchases. Disabling ‘one-click’ purchases and removing saved card details on your online accounts can help to stall you. Waiting for a minimum of a day – or better still a week – before buying something also gives you enough time to consider your decision, whilst you shop around for a lower price.
This also applies to simple convenience food and drink. If you take the time to purchase products in advance instead of buying from expensive cafés or restaurants for breakfast or lunch on the go, you can save money. For example, if you purchase good quality coffee at home and take it with you at the start of your day instead of buying from a coffee shop, you can save a lot of money without realising it. If £3 a day is how much you spend on coffee, this adds up to £15 in a working week, or £60 a month. If a couple decide to make the swap, it adds up to a saving of £120 a month.
Clear Your 'Cookies'
By deleting your cookies frequently, you will avoid being flooded with adverts for items you have been looking at online. These constant pop ups can sway even the most cautious shoppers. Getting into this habit will make it so much easier in the long run to save more and spend less.
Becoming more strategic with your money is something that we at KLO Financial Services can help you with. In order to find out more about improving your spending habits, talk to one of our local independent financial advisers today by calling 01926 492406.