Just thinking about trying to cut down on spending can be a bit painful. We imagine foregoing all the nice little things that make life feel good and subjecting ourselves to a grey future lacking joy.
It doesn’t have to be like that. These three ideas will help give your spending a bit of a trim without you feeling too deprived.
Spring Clean Your Financial Robots
In this case, we’re talking about all those regular spends that go out of your accounts automatically every month. Direct debits and standing orders are easy to set up, and equally easy to forget – even when they’re no longer relevant.
It’s a little task you can do without even leaving the house, and something you can get started on right this minute.
Go through all your accounts, bank, and credit cards, and stop the subscriptions, memberships and product insurances that aren’t giving you any benefit any longer.
Review your TV, film, magazine, mobile and gym subscriptions. Do you really get your full money’s worth? Can you get the same benefits by paying as you go? This is especially relevant on things like subscription box spending, with one report reckoning the average person spends over £500 annually.
So be ruthlessly honest and stop paying for things that aren’t really making life better.
Overhaul Your Food/Grocery Spend
Convenience is a glorious thing, and without it we’d never keep up with all the demands of our current over-busy lifestyle. But convenience costs, and often it’s the convenience of habit that keeps us stuck in a spending routine. Rethinking how you approach spending on food is another strategy you can put into immediate effect without it causing more than a ripple in your lifestyle.
Seemingly small things, like always buying lunch out on a working day, can add a substantial amount to the weekly outlay. Of course, it’s great to go out for lunch, but would you really suffer if you didn’t do it every day? And wouldn’t it be possible to take a packed lunch out to a park or sunny bench when the weather’s good? Picnics are not just for holidays.
Grocery shopping is another area where convenience can cost more. Spending a few minutes making a meal plan, creating a list of what you need to prepare those meals, then sticking to it when you’re in the shop, can really help curb impulse buying in the supermarket. There’s an environment benefit too, since we’d waste a lot less food if more people did this.
Likewise, changing the time of day you shop can have quite an impact. Late on weekdays is a good time, as this is the time supermarkets start discounting items with shorter shelf lives. The food is still good, but usually needs eating within the next few days. Since you’re shopping to a plan, that won’t be a problem.
Track Your Income and Expense
This one takes a little longer to see the benefit but can reveal some surprising information over a month or two. Based on professional accounting systems, it’s an easy way to get a better handle on how money flows through your accounts.
You just need a notebook (or a spreadsheet page) and four columns:
Date – when the transaction happened.
Item – what you bought or earned – wages go here too.
Cost – what you paid (be it cash or standing order) or earned.
Balance – add or subtract amounts for other columns and put the new total in this column for a running account of money available.
Standing orders or direct debits can be entered in the columns straight away because you know they’ll happen. Start the balance column off with the current balance from your bank statement, then go from there.
The act of writing down everything you buy makes spending a mindful activity. If you find it a chore, you don’t have to keep it up for a lifetime since just a month or two is enough to make you completely aware of your spending habits.
And if you find it an empowering exercise, it might even lead you to a new, lucrative career in accounting (which you can learn online), and having more coming in would definitely help with ongoing budgeting.
However you do it, figuring out your personal best way of mastering your finances puts you in control. And that’s always a good thing.
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