Always broke but don’t know why? Poor financial habits could be quickly emptying your wallet.
Read on to see the reasons you never have any cash to spare and how to make your money go further.
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Too many people don’t have a household budget. Every month adding up all your income (after tax) then subtracting how much you spend is a good starting point. Apps such as Mint and PocketGuard can help, or you could simply write down all your incomings and outgoings on an Excel spreadsheet. The key is to set a realistic budget you can stick to.
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In an age of cash cards and contactless spending it’s easy to overspend because no ‘real’ money is exchanging hands. One way to curb this is to draw out a set amount for the week and try not to use your cards – this way you’ll become aware of exactly how much you’re spending and where you can save.
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It’s well known that we’re more likely to buy more food when we’re hungry but, according to the University of Minnesota, hunger is more likely to make us buy other stuff too. This is because being famished stimulates our desire to acquire things. So eat before you shop or you’ll be buying more than you need.
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Frozen food, especially vegetables and more healthy items, lasts for longer and is often cheaper than fresh food. Reduce food waste and your shopping bill by stocking up on products you can freeze.
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A takeout habit can be expensive. Just halving the amount of fast food you eat could save you a lot of money.
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Similarly, making your own packed lunches will save you a small fortune.
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And there’s spending on coffee too. One way around this expense? Invest in a thermal coffee mug and make coffee at home before heading out.
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If you drive or use public transport to get to work when you could cycle or even walk you’re not only losing money, you’re missing a perfect opportunity to get fit without spending out on gym membership.
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If you watch a lot of films, box sets or documentaries switching to a streaming service such as Netflix, Amazon Prime or Disney+ will work out cheaper than buying DVDs or renting films through your TV service provider.
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The internet is a fantastic place for finding bargains but we can all have too much of a good thing. Being able to buy something with a few clicks rather than cold hard cash makes it harder to keep an eye on your spending, and you’re more susceptible to fake reviews, counterfeit goods, hidden costs, or fraud and identity theft. Limit your shopping online and then only use sites you trust
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Loyalty cards are everywhere – from coffee shops and supermarkets to airline carriers. Accumulated points mean money off and free goods. Yes, the companies are buying your loyalty, but if you shop with them regularly anyway loyalty cards can offer real rewards. And many are online or via apps so you don’t have to carry them around in your wallet or purse.
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This is no big secret – stores’ own ranges (often called basic, essential or value) are usually cheaper than branded goods and often taste just as good – as they can be produced in exactly the same factories.
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Stocking up by bulk-buying non-perishable items can make a real difference to a tight household budget. Taking advantages of offers then storing or freezing the products is a good way to make your money stretch further.
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Cashback websites, where you can earn money back by shopping online; coupon sites where you can grab coupons to save on your shopping; and luxury and leisure deal sites such as Groupon and Living Social all offer the chance to save money by being a savvy shopper.
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It pays to keep an eye on mortgage deals, especially when yours is coming to an end, the interest rates are changing, or if you’re not tied in. Sometimes, leaving a mortgage earlier than the term agreed works out cheaper in the longer term even if you have to pay a penalty charge upfront.
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Motoring, house, health, life, pet, phone – these are just some of the insurances we pay out for every month. They can add up to thousands a year so it’s worth looking for better deals annually. Alternatively, speak to your current provider and ask them for a better deal – you’d be amazed at how often they will oblige you.
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Credit card interest rates (APRs) can be very high. Change to an interest-free option if possible, set up a regular payment from your bank account to pay off a decent sum each month, then don’t use your card again until your debt is manageable.
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Find a plan to match your real usage – it could be that you’ve outgrown your current one or you don’t use your phone much but your contract cost doesn’t reflect this. Try going contract-free or pre-paid or tell your provider you’re leaving – they won’t want to lose your custom and will try to keep you. Use free messaging apps such as WhatsApp, or get rid of your voice plan and use Skype or Google Voice to make calls.
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According to endfoodwastenow.org, people in rich countries waste as much food as the entire net food production of sub-Saharan Africa. Plan meals and shopping lists, get clever with leftovers, and donate to food banks.
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There are a number of easy ways to reduce your household energy bills such as: turning down the heating; minimising the use of power showers (they can use up more water than a bath); washing clothes at a lower temperature; putting appliances on stand-by; and shopping around for a better value energy plan.
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Yes you deserve to eat out, take trips and taxis, and buy clothes, electronics and music but be aware of how much life’s little luxuries add up. Have a monthly budget for treats and stick to it. The likes of Groupon and Living Social are go-to sites for discounts and offers (though watch the small print) and Uber is cheaper than licensed cabs – though not as cheap as the bus.
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Shopping gives many of us a short-term high and provides an escape from depression or anxiety but it can have debilitating consequences on our finances. If you’re feeling like your shopping habits are out of control, talk to a friend, find an alternative ‘hobby’, or seek help from a doctor or therapist.
